Every state has a statute of limitations on debt collection -- a maximum amount of time after which the creditor may not sue the debtor in court to get his money back. In North Carolina, the statute of limitations for most debts is three years. However, different circumstances affect how and when the statute applies.
Written Contracts
The statute of limitations on collecting debts is 3 years if the debtor signed a written contract with the creditor. This includes most credit card debts, as the debtor must sign an agreement with the card issuer prior to using credit. The statute of limitations applies to the date the debtor defaults on the debt, not the date the debtor incurs the debt.
Extension of Statute of Limitations
If a North Carolina customer makes a payment on an open account, such as a credit card account, it extends the statute of limitations on all purchases on the account in the past three years. If the debtor defaults on his payment, each item purchased using the account over the past three years will have a different statute of limitations depending upon the date of purchase and the date a payment was last made on the purchase.
Judgments
If a debtor defaults, the creditor can get a judgment against him in court requiring him to repay the money. The judgment is enforceable for 10 years from the date the judge enters it into the record. Partial payments on the account do not affect this statute of limitations.
Suspension of Statute of Limitations
If a debtor files bankruptcy, or if she dies before repaying the debt, the statute of limitations is tolled, or suspended. During the suspension of statute of limitation, the time that passes does not count against the statute of limitations. For example, if a person declares bankruptcy and a year later a bankruptcy judge rules that a particular debt cannot be discharged via bankruptcy, the year that has passed does not count against the statute of limitations for collecting the debt.
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