North Carolina Judgment Enforcement and Collection Attorney Thomas Kerner

If I Try To Enforce A Judgment I Won Against A Consumer, Am I a "Debt Collector"?

One of the most frequent questions I am asked about judgment enforcement is whether or not the federal Fair Debt Collection Practices Act (FDCPA) applies to someone collecting a debt owed to them - without using an attorney or debt collector.  And the answer to that question is "no."

But a question that hardly anybody thinks to ask is:  Does the North Carolina Debt Collection Act (NCDCA) apply to me if I am collecting a debt owed to me?  And the answer to that is:  yes it does.  If the debt is "consumer debt" that is.  

In 2000, the North Carolina Court of Appeals decided Davis Lake Community Ass'n v. Feldmann, 138 N.C. App. 292.  In that case, legal questions arose as to whether a homeowners association, in collecting HOA fees, was acting as a "debt collector" within the meanings of either (1) the FDCPA, or (2) the North Carolina Debt Collection Act.

The Court found that under the FDCPA, the HOA was not a debt collector, as the FDCPA requires that the alleged debt collector be primarily in the business of debt collection.  Naturally, this is not the primary business of an HOA, so the act did not apply. However, the Court found no such limitation under the NCDCA.  The NCDCA provides that "any person" collecting a debt from a consumer in North Carolina is subject to its provisions.  Because of the breadth of that language, the court concluded that the HOA, in its attempts to collect dues from a homeowner, was indeed a "debt collector" within the meaning of the North Carolina Debt Collection Act.

So if you are collecting a consumer debt in North Carolina, you must become familiar with the requirements of the NCDCA. 

Collecting a Judgment in North Carolina, The Basics: Part I

The primary ways to obtain a judgment in North Carolina are as follows: (1) a jury verdict, (2) a judge's order following a bench trial, (3) a default judgment (which is also entered by a judge's order), (4) a Confession of Judgment, or (5) a Consent Judgment. There are also motions to confirm arbitration awards (giving the same force and effect to an arbitration award as a judgment entered originally in a court).

Once a judgment is entered by the Clerk of Court, the party owing the money is called the "Judgment Debtor." The winning party - the one to whom the money is owed, is called the "Judgment Creditor."  Once entered, a judgment creates a lien on the real property of the debtor in any county in which it is docketed, for a period of ten years.  Also, at any time during that ten year period, an execution may be issued by the clerk of court, ordering the seizure and sale of the judgment debtor's personal property.

Judgment creditors are entitled to initiate a variety of procedures in order to collect on their judgments. The most basic of these is the Writ of Execution. The Writ of Execution is issued by the Clerk of Court.

If the Judgment Debtor is an individual person, that person must first be served with a Notice of Right to Have Exemptions Designated (form AOC-CV-406), and a Motion to Claim Exemptions. There are two AOC forms for these (AOC-CV-407 and AOC-CV-415), and their use is determined by the age of the judgment.

For corporate defendants, no such notice is required.

If the judgment is against an individual, and arises out of a "personal, family or household" debt, then the provisions of the federal Fair Debt Collection Practices will still apply, as well as those of the more restrictive North Carolina Debt Collection Ac.