LEGISLATIVE BULLETIN: Protecting NC's Families from Abusive Debt Practices

By DIANE GILL MORRIS
July 7, 2009

EXECUTIVE SUMMARY:

 

  • DEBT BUYERS PAY PENNIES ON THE DOLLAR for old “debt.” In some cases, the debt has been charged off and the
    applicable statute of limitations has passed. In addition, sometimes debt buyers claim the debt is for more money than it actually is.
  • ABUSIVE DEBT BUYERS TARGET LOW-INCOME FAMILIES because they often cannot afford a lawyer. The debt buyers file lawsuits against the consumers, and if the consumers don’t respond to the legal filings, they could face default judgments that cost them thousands of dollars.
  • ABUSIVE DEBT BUYERS ALSO USE HARASSMENT and threats to get consumers to pay. Although many of these
    tactics violate current regulations, the penalties are not large enough to deter these practices.
  • SENATE BILL 954 WOULD INCREASE PENALTIES for violations of North Carolina’s debt collection laws and add
    those protections to the activities of debt buyers. It would also stop debt buyers from filing unsubstantiated lawsuits, and it would require a debt collector to show evidence to establish the amount and nature of the
    debt before a judge can enter a default or summary judgment against a consumer.
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