Submitted by Rachel R on Mon, 09/10/2018 - 9:39am
Is the clock running out on your debt?
Image by Jon Tyson via Unsplash
From the moment you go delinquent on debt in Greensboro, North Carolina, the creditor can come after you to collect what is owed. They have the right to use whatever legal means are available to get the money from you. They will also tack on late fees on top of the debt and collection agency fees if they enroll an outside firm to help. These efforts may continue until you pay or the statutes of limitation expire. But what does that mean?
Debt collection efforts don’t go on forever. The law stipulates a period within which the creditor can use the courts to enforce debt collection. If the debt is still outstanding after that period, the debt becomes statute barred. This means that the creditor loses the right to haul you into court over the debt.
In North Carolina, the statute of limitations on most debt is three years including auto loans, installment loans, credit cards, medical debt and personal loans. The statute is like a clock that ticks away time for the creditor to sue you over the unpaid debt. It starts ticking the last time you make a payment and when the debt goes bad.
Once the statute ticks away, the debt loses its “teeth” because they can’t enforce it by suing for a judgment to attach to your assets. In North Carolina, most creditors can’t garnish wages, but they can sue and if they get a judgment, pursue a lien. This can go against your auto, home, bank account, or another asset. But sometimes the clock resets – and that’s a problem.
When the statute of limitations clock resets, it’s called “tolling.” You might be at the very end of the statute of limitations and in the clear, but then an action you take tolls the statute then you’re back to square one and at risk. Some of the ways that the statute of limitations might toll include:
If you make a partial payment on the debt at any time before the statute of limitation expires, time begins to run again from the date of the new payment. It can be a small payment – even $5 – and it starts the process over. Creditors and debt collectors know this and may contact you and urge to make even a small payment. They know that it ties you to them for another three years.
If the credit account sits totally dormant, with no new activity on your behalf, the statute will run out. But if you purchase or pay, it will restart the clock, no matter how small the transaction.
Signing an agreement to pay the debt restarts the clock too because it’s like you borrowed all over again. This is another tactic debt collectors employ to toll the clock unless you know better.
Similarly, if you agree to a settlement arrangement, the three years reset. If you can’t meet the obligations of the arrangement or settlement, they can come after you in court.
If you have a co-debtor, and they make a payment, settlement offer, or agree to a payment arrangement, it doesn’t affect your statute of limitations, only theirs.
The good news is no matter the status of your statute of limitations bankruptcy can help with many debts. Unsecured debts like credit cards, medical bills, old utility balances, personal loans, and more, can be vanquished quickly with Greensboro bankruptcy. The moment you file, all debt collection activity must stop so it offers instant peace of mind.
To find out more, contact the Law Offices of John T. Orcutt. Read reviews, then call +1-919-646-2654 to schedule a free Greensboro bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.
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