Statute of Limitations on Debt in North Carolina

As a North Carolina resident, you have some pretty strong protections against collection agencies who seek to collect on older debts. This leveling of the playing field makes escaping previous debt mistakes easier for those who are unable to repay.

North Carolina
Oral Contract 3 years
Written Contract 3 years
Promissory Note 5 years
Open Accounts 3 years

As state law goes, North Carolina is listed among the states with the shortest statute of limitations. At just 3 years for most consumer debts, debt collectors have a comparatively short window of opportunity to pursue legal action against a debtor.

Both oral and written contracts have a limitation of 3 years. Open accounts, such as credit cards and open lines of credit, also have a limit of 3 years. Although sometimes incorrectly stated by many resources as 3 years, the actual statute of limitations for promissory notes is a longer 5 years.

The statute of limitations on your debt begins with the date of first delinquency, which is when your debt first fell delinquent. As a North Carolina resident, the only action that can extend the statute of limitations on your debt is if you make a payment towards it. Some states allow this to be extended simply by acknowledging the debt, but North Carolina is not one of these.

North Carolina is very unique in terms of debtor protection. First of all, it has a very short statute of limitations, leaving slow to act debt collectors out of luck. Second, those collection agencies that do successfully sue and win a judgment cannot garnish those wages. North Carolina does not allow for garnishment of private debts. Instead, the collector can only push to levy bank accounts or pursue liens.

Finally, North Carolina passed the Consumer Economic Protection Act of 2009, which makes attempted legal action on time-barred debt illegal. This last protection is the most important, since many debt collectors routinely pursue judgments on debts where the statute of limitations has expired. They do this because they know that over 90% of debtors fail to appear in court to inform the court that the debt is no longer collectible. This law protects North Carolinians from summary judgments on expired debts.

If you incur a debt and you are able to repay it, then you should make arrangements to responsibly pay back what you can. It is the right thing to do, and there are methods for doing so that will help you resolve the debt without causing further damage. However, no debt collector has the right to harass or abuse you. If you feel that your rights have been violated by a collection agency, then you may wish to sue them for civil damages.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
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