Debt collection laws in North Carolina

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

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.