Debt Collection Problems

Debt Collection Laws

North Carolina Statute of Limitations on Debt Collection

The statute of limitations is a time limit that the credit has to file a lawsuit against the consumer for failure to pay the debt. The time limit is calculated starting from the time the consumer broke the agreement to pay the debt. This limit varies by state, but once the lawsuit is filed (if it is on time), the statute of limitation is met. Many people confuse this statute with how long a judgment lasts. Once a judgment is entered, states vary on how long the judgment operates. Typically they last quite long (10+ years). Thus, many consumers are confused when they find they are having their wages garnished upon on a debt that may be more than a dozen years old. The reason for that is likely because there was a judgment entered and the statute of limitations stopped being an issue when the lawsuit was first filed.

Express or implied contract, not under seal: 3 years.

Contract and sale of personal property under seal: 10 years.

Open account: 3 years, NOTE: Each payment renews the SoL on all items purchased within the 3 years prior that payment. If no payment is made, the SoL runs from date of each individual charge. Contracts: From date of breach or default, unless waived or performance under the contract is continued.

Judgments: 10 years

Partial payment BEFORE the SoL expires renews the SoL from date of payment.

Payment AFTER Statute of Limitations expires renews ONLY if, at time of payment, circumstances infer the debtor recognized obligation to pay. Partial payment on open account restarts Statute of Limitations on purchases made within 3 years of payment date, if acknowledgment can be inferred, starts the statute anew as to the full obligation acknowledged, even if all of the charges were not made within the last three years. NC Continued...

Partial payment by one debtor does not renew the statute of limitations as against any a co-debtor unless that co-debtor agreed to, authorized or ratified the partial payment.

Partial payments do NOT have any affect the ten-year limitation on enforcing or renewing judgments.

Bankruptcy, Death or Disability: Filing of a bankruptcy tolls the statute of limitations for the enforcement of contracts and judgments.

Make sure you know your rights and do not hesitate to call SmithMarco, P.C. at 888-822-1777 with any questions, or contact us here.