Debtors have rights when collectors call
By Linda Bonnar, 4th Fighter Wing legal office
/ Published September 14, 2006
SEYMOUR JOHNSON AIR FORCE BASE, N.C. --
Debt collectors are responsible for collecting on overdue and delinquent bills, but when is enough, enough?
Each state has a debt collection law called the statute of limitation. The state law that applies to the debt will generally be determined as the state where the debt was acquired. The SOL period is the time limit within which the creditor has a right to file a lawsuit to collect on a debt. After the time period passes, creditors lose their right to begin a lawsuit against the debtor.
The SOL period varies from state to state and also depends on the type of debt, ranging from two-15 years. Most debts acquired in North Carolina, including open accounts, such as credit cards, and written contracts expire three years after the last payment was made. Promissory notes in North Carolina have an SOL of five years. If a creditor actually filed a lawsuit in a timely manner and obtained a judgment, the creditor has a different SOL to collect on the judgment. In North Carolina, creditors have 10 years after judgment to seek payment. There is no time limit on federal or state loans, income taxes, most fines, and in some states, past due child support.
This doesn't mean the creditor or debt collector cannot still file a lawsuit against the debtor even after the SOL has expired. Once a debtor receives a notice to appear in court regarding old debt, they should schedule a legal assistance appointment at the legal office to seek advice on how to respond. If the debtor fails to appear in court, the judge may rule in favor of the collector and the debtor could be liable for the old debt.
The debt collector may also try to collect the time-barred debt by contacting the debtor by telephone or mail at home or work. Collection agencies are betting debtors may not know their rights and instead will agree to pay at least a portion of the debt. Furthermore, some of these debt collectors may utilize illegal tactics to collect.
There is a federal law called the Fair Debt Collection Practice Act that imposes limitations on how debts are collected, including time-barred debts. If the debt collector continues to harass the debtor, contact the legal office for details on how to address the illegal tactics.
If a debt collector contacts the debtor regarding a time-barred debt, the debtor should not respond to the debt collector before speaking with the legal office or other legal counsel, because admitting the debt is owed or agreeing to make any payments may revive the old debt.
Finally, debtors should make sure the creditor or debt collector has not reported the debtor's account incorrectly with a credit agency. Creditors have a legal duty to report the debt accurately in accordance with The Fair Credit Reporting Act.
For any questions on old debts or to setup a legal assistance appointment, call the legal office at 722-5322.