As a business owner, the financial health of your business relies on your customers paying their bills in a timely manner. However, it’s not uncommon for people to skip paying their bills, leaving you in a difficult situation.
Instead of turning over debt to a collection agency, work with our team of Raleigh debt collection attorneys at Kirk, Kirk, Howell, Cutler, and Thomas, LLP. With decades of experience in business law, we know how to take the right steps on your behalf to get you the money you’re owed, whether it’s simple communication or legal action.
Understanding Commercial Debt Collection in North Carolina
There are two types of debt collection in North Carolina: secured debt and unsecured debt.
Secured debt refers to debt owed on real property, such as having a mortgage on a house or a car loan. If a buyer fails to maintain payments, the real property can be taken by the lender.
For example, if you own a car lot and a buyer fails to make payments, you do have the right to repossess that vehicle. However, the laws related to repossession are complicated, and a debt collection lawyer can walk you through the steps you need to take and even contact the debtor on your behalf prior to repossession to give them the opportunity to pay their bills.
Unsecured debt refers to bills owed after the consumer has signed a legally binding contract stipulating they will pay the bills, but there isn’t property to repossess. Examples of unsecured debt include:
- Unpaid rent or damages owed after the renter has moved out
- Unpaid utility bills
- Medical bills
- Credit card bills
- Bills owed on home repairs or renovations
If these bills are unpaid, a business owner can work with a debt collection attorney or a collection agency to attempt to collect the debt.
Choosing a Debt Collection Attorney over a Collection Agency
As a business owner, you may think that your only option to collect a debt that’s 90 days late or more is working with a debt collection agency. You turn the account over to them, and they send letters, make phone calls, and attempt to collect on the debt. However, most debt collection agencies are limited to those basic communications which go ignored by consumers. The collection industry only averages about a 20 percent recovery rate on debt.
A debt collection attorney has additional resources that are far more effective at collecting debt. Often, sending a letter from an attorney outlining future actions is all it takes to motivate a consumer to pay their bills rather than run the risk of having to go before a judge. However, if that doesn’t work, further legal action can be taken on your behalf.
Legal Action for Debt Collection
If a letter or other communication does not work to collect an unsecured debt, your attorney may recommend going to court to get a judgement. A judgement is the court order requiring the debtor to pay the debt. This gives you and your attorney more legal standing and more options to collect.
In North Carolina, wage garnishment, or requiring an employer pay a debt from a worker’s paycheck, is generally not an option for unsecured debts. The only types of debts that can be deducted directly from your paycheck include:
- Unpaid taxes
- Child support and alimony
- Student loans
- Payment of ambulance services
We can help you put a lien on property until a debt is paid off. The lien means that if debtor sells the property, you will be paid the money you are owed first. Liens can be put on a property due to:
- Mechanic’s Lien: Also called a construction lien, this is filed on behalf of construction companies. If you provide work for a homeowner, and they don’t pay, the court can grant a lien on the property until the work is paid off.
- Judgement Lien: If the court places a judgement on the debtor, the judge can place a lien on their property until the debt is paid.
- Tax Lien: If property taxes aren’t paid, a lien is placed on the property until all taxes are paid.
The enforcement of liens can lead to property foreclosure and other serious problems for the consumer.
Levying Bank Accounts
North Carolina law does allow a creditor to levy a bank account or seize property to pay for a debt. While this is often a last resort, a debt collection lawyer understands the Service of Process steps necessary to access a debtor’s funds. We also know what types of funds are exempt from seizure and how to seize money legally.
Additionally, a judgement increases the statute of limitations for debt collection. In North Carolina, the statute for most unsecured debt is three years from the time the bill goes unpaid. For example, if the bill was originally due on September 1, 2015, no further attempt can be made to collect past September 1, 2018.
A judgement extends that statute of limitations to 10 years, meaning any of the above legal options may be on the table for a much longer period of time.
Contact Our Raleigh Debt Collection Law Firm
If you are owed money, don’t let your business suffer! To learn more about how our debt collection attorneys can help you collect money you are rightfully owed, contact us today! Call us today at (919) 615-2473 or fill out our contact form below to speak with our attorneys.
Protecting your Privacy ~ Your privacy is our primary concern. At Kirk, Kirk, Howell, Cutler & Thomas, LLP., we understand the importance of protecting your privacy and will never share your contact information with a 3rd party. Contacting our law firm does not imply any form of attorney-client relationship.
Information presented on this website should not be construed as formal legal advice or the formation of an attorney-client relationship. Additionally, any email sent to Kirk, Kirk, Howell, Cutler & Thomas, L.L.P. or any of its lawyers at the email addresses set forth in this website will not create an attorney-client relationship.