Dealing with Time-Barred Debt in North Carolina
Have you recently heard from a creditor or debt collector about an old debt from years ago that you had forgotten about? If so, you may have questions about what to do next. Do you have to pay the debt? Can creditors and debt collectors legally contact you regarding old debt? And what should you do if the debt is past the statute of limitations?
What Is Time-Barred Debt?
Time-barred debt refers to old debt that a creditor cannot sue you to collect. Debt becomes old when the statute of limitations expires on the creditor’s legal claim to collect the debt. But even though a creditor cannot successfully sue you to collect the debt, you still owe it and may be contacted by debt collectors who may try to convince you to pay.
What’s the Statute of Limitations for Debt in North Carolina?
In North Carolina, the statute of limitations on most types of debt requires a creditor to file a lawsuit to collect the debt within three years of the last activity on the debt account. However, other types of debt have different statutes of limitations, including:
- Retail installment contract debt, such as car loans — 4 years
- Mortgages — 10 years
- County tax debt — 10 years
Once the statute of limitations expires on a debt account, a creditor cannot succeed in recovering the debt through a lawsuit. If a creditor does file suit, you can file a motion to dismiss the case.
If a judgment has been obtained then that runs for 10 years at the statutory rate and can be renewed for another 10 years.
How to Deal with Time-Barred Debt
Consider the following tips for dealing with time-barred debt in North Carolina:
- Request validation or dispute the debt — You have the right to request validation of any debt that a creditor or debt collector contacts you concerning. You should request validation or dispute the debt if you think it doesn’t belong to you or that you paid it off. debt collectors may continue to contact you.
- Do not pay anything yet — Do not agree to pay anything on a debt you believe may be past the statute of limitations. Because the statute of limitations runs from the last activity on a debt account, any payment risks resetting the limitations period.
- Talk to a lawyer — Consult with an attorney to understand your rights and options. If the statute of limitations has expired on a debt, you may have an affirmative defense you can assert to a lawsuit.
Having Trouble with Debt in North Carolina? Get in Touch with Sasser Law Firm Today
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.