Debt collection laws in North Carolina

Here are your rights in North Carolina if debt collectors come knocking

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Debt collection is a process in which a creditor or third-party debt collector attempts to collect on unpaid debts that are delinquent or in default — and the industry is highly regulated. For example, there are federal laws that limit what debt collectors can and cannot do and say, and individual states can pass their own legislation to afford even more rights to consumers dealing with debt in collections.

In the state of North Carolina, not only are residents protected from certain types of collections violations on a federal level, but the state protects against certain acts as well.


Key insights

  • On a federal level, the Fair Debt Collection Practices Act protects consumers from harassment, threats and other abusive practices from debt collectors.
  • The North Carolina Debt Collection Act and the North Carolina Collection Agency Act outline rules debt collectors must follow at the state level.
  • Consumers have the right to end collections calls and activities with written notice to the collection agency.
  • Stopping collection calls won't make unpaid debts go away or eliminate additional consequences of nonpayment.

Federal debt collection laws

The Fair Debt Collection Practices Act (FDCPA) is a federal debt collection law that affords all Americans certain rights when unpaid debts are being pursued by bill collectors.

This act prohibits debt collectors from using deceptive or abusive debt collection practices, such as contacting you at odd hours, calling you repeatedly or making false threats regarding legal actions they plan to take. Debt collectors are also barred from revealing the existence of unpaid debts to other parties, both on social media and through direct forms of communication.

According to the Consumer Financial Protection Bureau (CFPB), the FDCPA requires debt collectors to contact your attorney instead of reaching out to you personally if you have legal representation already in place.

Also, note that the FDCPA lets you stop all contact from debt collectors by informing them in writing that you do not want to receive communications any longer. If the debt collector continues its communications, you can sue them under the FDCPA and receive coverage of your legal fees as well as damages.

MORE: How to handle bill collectors

North Carolina debt collection laws

North Carolina debt collection laws, which are outlined in the North Carolina Debt Collection Act (NCDCA) and in the North Carolina Collection Agency Act (NCCAA), provide some overlapping protections that are also offered on a federal level with the FDCPA.

However, the state breaks down exactly what debt collectors in North Carolina can and cannot do, which is helpful for knowing if your rights have been violated.

Debt collection practices

Debt collectors in North Carolina are legally prohibited from:

  • Using profanity or threats of violence to collect on a debt
  • Telling you that you will be arrested if you don't pay
  • Pretending to be attorneys or government employees
  • Telling employers or other third parties about your debts
  • Pretending to contact you for reasons other than debt collection
  • Contacting you before 8 a.m. or after 9 p.m. unless you agree ahead of time
  • Contacting you at work when they know your employer disapproves

North Carolina debt collectors are legally allowed to do the following:

  • Contact you in person, by mail, by telephone or by fax about your unpaid debts
  • Contact you at home between the hours of 8 a.m. and 9 p.m.
  • Contact you at work provided the debt collector doesn't have a phone number to reach you elsewhere (unless your employer disapproves of the contact)
  • Reach out to you through other people you know, including neighbors, relatives and friends, although the reason for the contact must remain confidential

Statute of limitations

In the state of North Carolina, the statute of limitations for the majority of debts is set at three years. This means creditors have up to three years to sue you for unpaid debts starting from the date a debt is considered delinquent.

Any lawsuit filed after three years from that date is invalid since debts that are older than the statute of limitations can no longer be pursued based on North Carolina law.

Licensing and registration

According to the North Carolina Department of Insurance, debt collectors in the state must be licensed and bonded. 

Consumer rights

Consumers in North Carolina have the right to tell debt collectors to stop contacting them in writing. Once the debt collector receives the notification, they must cease all contact other than communication about specific actions a creditor is going to take against an account.

You have the right to file a complaint with the North Carolina Department of Justice if you feel your rights have been violated under state debt protection laws. You also have the right to sue creditors and debt collectors for violating your rights under the FDCPA, the NCDCA and the NCCAA. North Carolina state laws specifically allow consumers to sue debt collectors for actual damages, statutory damages ($500 to $4,000 per violation) and their attorney fees.

» MORE: How to get out of debt

Could your debt be reduced or forgiven? Take our financial relief quiz.

    FAQ

    How long can creditors try to collect a debt in North Carolina?

    The statute of limitations for collections activity in North Carolina is set at three years. This means creditors have up to three years to sue you for repayment of unpaid debts, starting the date the debt becomes delinquent.

    Can I get sued for unpaid debts in North Carolina?

    Debt collectors can sue you for unpaid debts in any state, including in North Carolina. Debt collectors who win a judgment against you may be able to garnish your wages, freeze your bank account or withdraw money from your bank account.

    Bottom line

    Dealing with debt collectors is never fun, and it can be downright stressful when legal actions are being taken against you or may be in the future. To handle the situation the best you can in the state of North Carolina, you should consider negotiating a payment plan with the creditor or meeting with a debt attorney who can provide practical advice and solutions.

    Also, consider working with a nonprofit credit counseling firm that can advise you on next steps and help you get your finances back on track.


    Article sources
    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Federal Trade Commission, "Fair Debt Collection Practices Act." Accessed Nov. 7, 2023.
    2. Federal Trade Commission, "Fair Debt Collection Practices Act." Accessed Nov. 7, 2023.
    3. Consumer Financial Protection Bureau, "What laws limit what debt collectors can say or do?" Accessed Nov. 8, 2023.
    4. Consumer Financial Protection Bureau, "How do I get a debt collector to stop calling or contacting me?" Accessed Nov. 8, 2023.
    5. North Carolina Department of Justice, Attorney General Josh Stein, "Debt Collectors." Accessed Nov. 9, 2023.
    6. Smith Debnam Attorneys at Law, "North Carolina Provides Some Clarification and Relief on Debt Collection." Accessed Nov. 9, 2023.
    7. Farmer & Morris Law, "North Carolina Statute of Limitations on Debt." Accessed Nov. 9, 2023.
    8. North Carolina Department of Insurance, "Rules and Regulations Regarding Collection Agency Licensure." Accessed Nov. 9, 2023.
    9. Risk Strategies, JW Surety Bonds, "North Carolina Collection Agency License Guide." Accessed Nov. 9, 2023.
    10. Consumer Financial Protection Bureau, "What information does a debt collector have to give me about a debt they’re trying to collect from me?" Accessed Nov. 8, 2023.
    11. Gillespie & Murphy, P.A., "What Are North Carolina's Debt Defense Laws?" Accessed Nov. 9, 2023.
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