Anybody here from North Carolina?
Just saw this and it is really interesting:
http://www.visioncredit.org/north-carolina-bans-collection-of-old-debts/
North Carolina Bans Collection of Old Debts
September 9th, 2009 by Kenneth Long
With a signature from Governor Bev Purdue, North Carolina effectively banned all collection attempts on old debts. This change is a part of the Consumer Economic Protection Act of 2009.
What Are Old Debts? An old debt as defined by the Act is any debt in which the statute of limitations has expired. While North Carolina lists a statute of limitations of 5 years for a promissory note, its open credit accounts may only be collected on following 3 years from the default. Oral and written contracts also have a statute of limitations of 3 years for North Carolina residents.
Prior to this Act, debt collectors could generally continue with collection attempts even though the statute of limitations had expired. What this means is that the debtor had no legal obligation to pay and yet they still faced the phone calls and letters asking for payment. If they collection agency took them to court, the debtor could show up and declare that the statute of limitations had expired and that the debt was no longer collectible.
In recent years, the collection of expired debt has become big business. Many of these debts were purchased for a few cents per hundred dollars. Since they had almost nothing invested in the debt, nearly all of what they collected contributed to profits.
Many consumer advocates began referring to these expired debts as zombie debts, and those collection agencies that pursued them as zombie debt collectors. While the debts were essentially dead, they never seemed to go away.
Specifically, the Act forbids the collection of expired debt from any North Carolina resident. The Act states that no collection agency shall collect or attempt to collect any debt by use of any unfair practices. Such practices include, but are not limited to, the following:
When the collection agency is a debt buyer or is acting on behalf of a debt buyer, bringing suit or initiating an arbitration proceeding against the debtor or otherwise attempting to collect on a debt when the collection agency knows, or reasonably should know, that such collection is barred by the applicable statute of limitations.
As such, the Act forbids the collection of zombie debts. It is important to note that while a debt may no longer be collectible after the statute of limitations has expired, it may still remain on a credit bureau report for a full 7 years after the default.
