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How to Settle a Debt in North Carolina

Sarah Edwards | March 13, 2023

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.

How it feels to settle your debt in North Carolina ^^

Summary: Receiving notice of a pending debt lawsuit against you is frustrating. You’ll want to resolve the matter before your court date, which is easier than it sounds. Just respond to the lawsuit in court before North Carolina’s deadline, send a settlement offer to kickstart negotiations, and get the settlement terms in writing. SoloSettle can help with all these steps and more.

If your creditor is chasing you for an overdue bill or missed payment, you’re likely receiving lots of phone calls and letters. If you don’t resume your payments, your creditor might sell off your debt to a collection agency or take legal action against you.

Legal action against a consumer is known as a debt lawsuit. Creditors who file a debt lawsuit seek to obtain a judgment against the consumer, which will allow them to increase their collection activities. A judgment can enable the creditor to garnish a consumer’s wages or freeze their bank account.

You’ll want to avoid a judgment and stop further collection activities by your creditor. You can do so through the debt settlement process.

There are 3 steps to debt settlement

If you’ve been sued for debt in North Carolina, use these three steps to settle your debt and move on with your life:

  1. Respond to the debt lawsuit with an Answer.
  2. Make an offer to start negotiations.
  3. Get your settlement agreement in writing.

Now, let’s break down each step further. Don’t like reading? Check out this video instead:

1. Respond to the debt lawsuit with an Answer

Your creditor will begin the legal process against you by filing a Summons and Complaint. The Summons notifies you of the lawsuit, and the Complaint lists the reasons for suing, such as lack of payments toward your loan. The Complaint will also indicate your total outstanding balance, including any interest and fees.

You have 30 days to respond to a debt lawsuit in North Carolina before you automatically lose.

You’ll want to respond to your creditor’s Complaint with a formal legal response, which is known as an Answer. An Answer is your defense to the lawsuit. You’ll indicate why you feel the Complaint against you is inappropriate or inaccurate.

For instance, you could claim you don’t have a business relationship with the collection agency or that the amount sought in the lawsuit doesn’t align with your records. If these don’t apply to you, seek out a defense that does.

Make the right defense the right way with SoloSuit.

While you plan to settle the debt with your creditor before your court date, an Answer allows you to defend yourself if the settlement falls through. Without an Answer, your creditor can ask the judge for a default judgment. This type of judgment can lead to wage garnishment and liens on your property.

2. Make an offer to start negotiations

Next, decide how much you can offer in a settlement. Assess your upcoming income and check your savings. If you have access to cash through other means, such as borrowing money from friends or family, ask for help.

Your creditor will weigh your offer against the alternative (a judgment). Even if they obtain the judgment, they’ll need to go through costly collection activities to recover the money. A settlement is usually more attractive than the collection process.

You may go through several rounds of negotiation with your creditor before reaching a deal. Keep a cool head, and don’t agree to any terms you know you can’t follow through with.

But how much should you offer to settle a debt? The answer can be found by considering two factors:

  • How much you can pay: Calculate how much money you have left over each month after you pay for the basics: food, shelter, utilities, and transportation. Subtract other costs that must be paid like other non-delinquent debt. Add the difference to any savings you have available to pay off this debt. The sum is the amount you have available to pay off the debt. In other words, use this formula to figure out how much you can pay:

    Amount available to settle = (monthly income – monthly costs) + savings)
  • How much you think the collector will accept: This is a little tricky because debts settle within a broad range of amounts. They can settle for amounts ranging from 1% to over 100% of the total amount of the debt. More frequently, we see them settle for 60% or more

Ideally, you’ll want to offer your creditor at least 60% of the total value of your debt. That amount is enough to convince them you’re serious about settling while still giving you room to save money.

SoloSettle takes care of the negotiation process.

3. Get your settlement agreement in writing

Once you have a deal with your creditor, you’ll want to get it in writing. A written contract ensures that everyone understands the terms of the agreement.

Your agreement should indicate the amount you’ll repay, the due date, and the payment method. It should also include a statement that releases you from the remaining balance. The creditor won’t be able to take further collection action against you and will have to drop the lawsuit once you make your payment.

You can prepare your contract in advance of the negotiation process. Once you have a deal with your creditor, you’ll insert the relevant details before sending it to sign.

SoloSettle manages your debt settlement agreement document for you.

We recommend that you ask your creditor to notarize the agreement. A notarized agreement ensures you have a legal witness to the contract. If your creditor tries to back out of the deal, you’ll have the signed agreement to protect you.

Here’s a debt settlement agreement example to give you an idea of what to include in yours.

Now, let’s take a look at an example of how to settle a debt in North Carolina.

Example: Leah is being sued by Encore Capital Group, a debt collection agency, for an old credit card debt of $8.000.Leah lives in North Carolina, so she only has 30 days to respond to the lawsuit before losing automatically. Leah can’t afford to Encore fully, so she uses SoloSettle to respond and offer a settlement. After drafting an Answer to Ecnore’s Complaint, she contacts the company with a $5,200 offer. Up Top Finance counters with an offer of $6,000, which Leah accepts. Once she has a signed and notarized settlement agreement from Encore Capital Group, SoloSettle transfers Leah’s payment over, keeping her financial information secure and private. Encore drops the lawsuit against Leah and reports the account settled to the credit bureaus.


What are North Carolina’s debt settlement and debt collection rules?

Under NC Gen Stat § 58-70-95 (2021), debt collectors cannot take specific actions against a consumer, including:

  • Threatening to use violence to harm an individual or hurt their reputation.
  • Representing that nonpayment of a debt will result in the arrest of a person.
  • Telling someone they’ll seize their property or wages unless they have the right to do so.

NC Gen Stat § 58-70-100 (2015) prevents harassment of consumers by debt collectors. Creditors cannot do any of the following:

  • Use profane or obscene language to collect a debt.
  • Call a debtor with unreasonable frequency.
  • Call when the consumer is likely to be asleep.
  • Call the consumer at their place of employment when they’ve asked the collector not to.

The NC Gen Stat § 58-70-110 prohibits debt collectors from using these deceptive practices:

  • Using someone else's name to communicate with a consumer concerning a debt.
  • Falsely representing the character or amount of the debt in a legal proceeding.
  • Telling the consumer the debt collector has something of value in its possession.

North Carolina adheres to the federal Fair Debt Collection Practices Act (FDCPA), which has similar protections for consumers in collections.

Like other states, North Carolina has statutes of limitations that cap the time creditors have to pursue a debt lawsuit against a consumer. Under NC Gen Stat § 1-52 (2015), written and oral contracts have a three-year statute of limitations, as do collections on account.

What’s the best debt settlement company?

There are several debt settlement organizations you can get help from. Here are a few of our recommendations.

SoloSettle

SoloSettle helps individuals facing debt lawsuits resolve the matter with their creditors and debt collectors.

SoloSettle, powered by SoloSuit, is different from traditional debt settlement companies. Here’s how:

  • You can settle the debt on your own with SoloSettle.
  • You have legal defense built in with SoloSuit. You can respond to a debt lawsuit and fight off collectors in court while working on the settlement.
  • You don’t have to make any payments until you’ve reached a debt settlement agreement.
  • You can settle a debt of any size with SoloSettle. Many debt settlement companies require you to have a large debt of $15,000 or more to enroll.
  • You stay updated with each step of the settlement process until an offer is accepted by your creditor or collector.
  • Check out this video to learn more about how to settle your debt on your own—once and for all.

Settle with SoloSettle

Make an Offer

National Debt Relief

Individuals who enroll with National Debt Relief spend two to four years making monthly payments, which go toward debt settlement. The company charges 15% to 25% of the total value of your debt in fees, and you must have a minimum of $10,000 in unsecured debt to qualify.

Freedom Debt Relief

Freedom Debt Relief is one of the oldest debt settlement companies. Since 2002, it has helped thousands resolve their debts and move forward with a clean financial slate. Programs last between two and four years, and customers pay the company 15% to 25% of their debt in fees.

New Era Debt Resolutions

This company has been in business for over 23 years, making them a trusted name in debt settlement. They have an A+ rating from the Better Business Bureau (BBB).

Century Support Services

Century Support Services has over a decade of experience in helping consumers settle debts and maintains an A+ rating from the BBB. The business has consistently high customer satisfaction scores, but the fees can be steep. Make sure you understand the fee structure before making a final decision.

How should I contact my creditor?

If you’re ready to start the debt settlement process, you can contact your creditor via email, phone, or snail mail.

We recommend email since it’s quick and direct. Once you send your email asking for a settlement, you’ll generally receive a response within the next business day. You’ll have time to consider your creditor’s reply before deciding.

If time is of the essence, you can call your creditor. However, you should record the conversation so that you have a record of any deal you reach. Under NC Gen Stat § 15A-287, you can record a phone conversation you are participating in without telling the other person.

FAQs about settling debts in North Carolina

Learn the answers to some of the most common questions about debt settlement in North Carolina.

Q. How can I get out of debt in North Carolina?

Establishing a budget and repayment plan is the best way to get out of debt. Some people increase their monthly payments toward a single debt. Once it is fully repaid, they follow the same practice for the remaining obligations. You can consider debt settlement or bankruptcy if it is impossible to make even minimum payments.

Q. Is it better to settle a debt or pay it off?

It’s best to repay your debts rather than attempt to settle them. Repaying your debts looks better on your credit report and keeps a positive relationship with your creditors. However, settling your accounts can help you avoid potential repercussions, like a judgment or bankruptcy, if you're in too much debt.

Q. What will most debtors settle for?

We’ve found most creditors will settle for 50% to 60% of the total value of a debt. However, you should only pursue debt settlement if you face extenuating financial circumstances or are trying to avoid bankruptcy. Debt settlement usually reduces your credit score in the short term, making it difficult to obtain loans.

How to get debt relief in North Carolina

SoloSuit has additional guides you can review concerning debts in North Carolina.

Debt settlement is possible in North Carolina

While a debt lawsuit can be scary, settling your obligations before your court date is possible. Review all the information you can find on SoloSuit, and follow our instructions for negotiating your settlement. Make sure to get your agreement in writing before sending your money.

SoloSuit has solutions for people who need help with debt — check them out!

What is Solo?

Solo makes it easy to resolve debt with 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.

SoloSettle can help you contact your debt collector or creditor and negotiate the debt to settle for less, all online. It simplifies and streamlines the process to settling your debt.

No matter where you find yourself in the debt collection process, Solo is here to help you resolve your debt.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

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Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

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Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

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Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

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Personal loan and debt relief reviews

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Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

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It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



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