How to Get Debt Relief in North Carolina

Sarah Edwards | October 19, 2022

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

SoloSuit is on its way to rescue you from debt

Summary: If you're struggling with debt in North Carolina, SoloSuit can help you find the relief you need.

If you're currently struggling to maintain a basic quality of life with significant debt hanging over your head in North Carolina, you may be wondering what debt relief options are available. Debt can be a thorn in your side, especially if you have other worries, such as raising a family or saving for retirement.

In North Carolina, the average Durham household carries $9,090 in credit card debt. Rising costs around the world haven't helped either. Inflation is at an all-time high, and the cost of goods such as gas, housing, and food has soared since last year.

While North Carolina has a cost of living index that's lower than other states, families still struggle with low wages. The average wage for an individual living in North Carolina is $53,100, while the national average is $58,260.

While costs are high, there are debt relief programs available. The federal and state governments also offer certain protections for consumers who have debt.

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (FDCPA) is designed to protect consumers from nefarious tactics used by debt collectors. It also outlines the methods that debt collectors can and can't use when attempting to collect a debt.

Some practices that have been deemed illegal by the FDCPA include:

  • Using obscene language when communicating with a consumer
  • Publishing a list of consumers who refuse to pay debts
  • Pretending to be someone else when attempting to collect payment on a debt
  • Threatening to take an action that can't be legally taken
  • Implying that the person has committed a crime when they haven't

If you are being pursued for a debt by a collections agent and believe that their attempts constitute abuse or harassment, submit a complaint to the Consumer Financial Protection Bureau (CFPB).

How does the North Carolina statute of limitations work?

The statute of limitations limits the period that creditors have to sue consumers for outstanding debts. Each state has its own rules on time limits to pursue debts through the courts.

North Carolina's statute of limitations regarding debt collection appears below:


North Carolina Statute of Limitations
on Debt

Debt Type

Deadline

Medical

3 years

Credit card

3 years

Auto loan

4 years

Judgments

10 years

State debt

No limit


Source: Findlaw

Once the statute of limitations for the debt has passed, the creditor can no longer take action against you in court. However, they may continue to send you letters or call you in an attempt to collect the debt.

Just because the statute of limitations has passed doesn't mean that you don't have to pay back your debt. If you validate the debt or make any payments toward it, you restart the statute of limitations timeline. So, be careful before you start making any payments to a debt collector.

How can debt consolidation help me?

Debt consolidation is a type of debt relief program that allows consumers to pay off their outstanding debts more quickly and with less money spent on interest.

These programs involve working with a specialized lender who provides the money to pay off all of your outstanding loans. In turn, you agree to make a single monthly payment to the debt consolidation lender until the balance is paid off.

Typically, debt consolidation allows you to obtain a lower interest rate than that offered by traditional creditors. Since you aren't stopping payments or otherwise harming your credit history with your lenders, there's little impact on your credit score. It's a win-win solution for those who can obtain a debt consolidation loan.

The drawback to this type of debt relief program is its requirements. Recipients must have decent credit to obtain a debt consolidation loan. A credit score of at least 650 is usually required to get the best deals on your loan.

Who should consider debt settlement?

Debt settlement is another type of debt relief program. It involves negotiating with your creditors to obtain a lower outstanding balance, which you pay off immediately. You can attempt to handle debt settlement on your own, or you may work with a debt settlement agency.

If you decide to work with a debt settlement agency, it's important to choose one that is reputable and has good reviews. Many debt settlement agencies are scams; they promise a significant reduction in your debt but aren't able to obtain it, or they require you to pay them upfront.

A reputable debt settlement agency may be able to reduce your debts by up to 50%. However, they will charge a fee for their services, so make sure you know what you're signing up for when you hire a debt settlement agency..

If you choose to go the debt settlement route, you can expect your credit score to drop initially. This is because the agency will usually ask you to stop making payments to your creditors in an attempt to get you a better settlement deal. Additionally, the IRS considers the difference between the settlement amount and the original amount as taxable income. These are some of the risks of debt settlement.

Try one of these North Carolina debt relief programs

As a North Carolina resident, you may qualify for debt relief programs provided by the state and federal governments. Check out these North Carolina debt relief programs to see if you are eligible:

  • Work First: North Carolina's version of TANF, this program offers short-term training and other services to increase the chances of employment to help parents support their families.
  • Benefit Diversion: Provides a one-time lump-sum payment equal to a maximum of three months of Work First Family Assistance benefits to families experiencing a temporary crisis involving employment.
  • Emergency Assistance: For families experiencing a financial emergency, this program offers financial assistance to help cover the costs of housing and utilities.
  • Low Income Energy Assistance (LIEAP): A federally-funded program that provides for a one-time vendor payment to help eligible households pay their heating bills.
  • Food and Nutrition Services: A federal food assistance program that provides low-income families the food they need for a nutritionally adequate diet.
  • NC Medicaid and Health Choice: Publicly funded children's health insurance programs open to North Carolina residents who meet income, age, and immigration guidelines.

When is bankruptcy an option?

Bankruptcy should only be used in cases where an individual sees no way out of their debt and needs a clean slate. New federal laws were put in place in recent years that place restrictions on individuals seeking to get out of debt through bankruptcy. This means that you must meet certain income restrictions to qualify for bankruptcy.

The two main types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 bankruptcy wipes most debts clean, without the individual needing to pay any more toward their creditors.

A Chapter 13 bankruptcy is considered to be a reorganization. In this type of bankruptcy, the individual may need to make some repayments toward their debt before it's eliminated.

Working with a bankruptcy attorney can give you better clarification of the type of bankruptcy you may qualify for and how it will impact your personal situation.

Are you being sued for debt in North Carolina?

If you are being sued for debt in North Carolina, it's important to file a response to the claim against you. SoloSuit's free Answer form can help you prepare your response in less than 15 minutes.

Learn more about how to respond to a debt lawsuit in this video:

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote guides on each state’s statutes and more.

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