Blog Posts

Credit Card Debt in NC

4/2/2018

Updated 9/8/2019

With credit beginning to flow again with the end of the great recession credit card balances continue to rise for American households. The great trap of credit cards is the low introductory offer combined with easy balance transfers allowing people to acquire more debt than they could ever hope to repay often leading to bankruptcy. In the past the fine print outlining all the potential risks was at least mailed with the application. Today the application and approval process is simply a few clicks on a computer or smartphone constituting an electronic signature.

Although registration of arbitration awards as judgments seems to have ended in North Carolina there are many questions surrounding credit card debt explored herein including debt defense and debt settlement.

Can I be sued for credit card debt in NC?

Yes- Credit cards are legally allowed to sue when the borrower is in default. For some reason many people think all creditors can do is put a negative mark on a borrower’s credit report. The bottom line is this- If banks could not sue for credit card debt they would stop issuing cards. Some of the main law firms that represent banks and debt buyers for credit cards lawsuits in North Carolina are listed below. These law firms generally represent the plaintiffs listed and do not actually own the debt.

Brock and Scott, PLLC- Wells Fargo, Bank of America, N.A., TD Bank, USA, N.A.
Sessoms and Rogers, P.A.- FIA Card Services, Portfolio Recovery Associates, Unifund CCR Partners, Barclays Bank Delaware, Midland Funding, LLC
Bernhardt and Strawser- Bank of America, Citibank
Glasser and Glasser, PLC- Bank of America, N.A.
Smith Debman- Discover Bank, BB&T, Midland Funding
RAS LaVrar, LLC- Capital One
Dominion Law Associates- Target National Bank
The Green Law Firm, P.C.- One Main Financial, LLC
Zwicker & Associates, P.C.- American Express National Bank

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Alimony Tax Law Change

1/13/2018

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New alimony agreements and Court orders created starting in 2019 will no longer treat spousal support as a taxable event. This is a dramatic change from what has been the law since 1942, which has allowed anyone paying alimony to deduct the full amount paid from their taxable income. Under the new Tax Cuts and Jobs Act signed by President Donald Trump alimony will essentially be treated just like child support- it will be a non-taxable event for both the payor and recipient.

The impact of this change in the tax code regarding spousal support is national (not just North Carolina) and will effectively make divorce more expensive for many who rely on spousal support to maintain their standard of living. As the tax change of alimony applies to Court orders and separation agreements signed after December 31, 2018 those in the middle of divorce right now have just under a year to finalize any deal under the old/current law.

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Are credit cards marital debt?

11/5/2017

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The presumption in North Carolina is that all assets accumulated during marriage are part of the marital estate. There is no such presumption when it comes to martial debts. That being said, debts incurred during the marriage for the joint benefit of the parties are considered to be marital debts. This can certainly include credit cards only in the name of one spouse if those debts were accumulated for the benefit of the marriage.

Even though a creditor such as Bank of America or Wells Fargo may only be able to sue the cardholder a North Carolina family court judge can order the other spouse to make payments or account for that debt in the dividing the marital estate via property division otherwise known as equitable distribution. Equitable does not always mean equal, but judges usually try and divide marital assets 50/50 to the extent possible absent a compelling reason for an unequal distribution.

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New Expungement Law in NC

8/1/2017

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Updated 9/8/2019

Governor Roy Cooper recently signed a new expungement law that went into effect on December 1, 2017. The main change is a reduction in the wait period to expunge non-violent misdemeanor and felony convictions. A primary goal of Senate Bill 445, which was a bipartisan effort, is allowing more people to clear their criminal record faster. The hope is 2 million North Carolina residents with criminal records will be able to get jobs after they have paid their debt to society.

As part of the same initiative, House Bill 280, which goes into effect on December, 1 2019, raises the minimum age to be charged as an adult to age 18 for most non-violent offenses. North Carolina is one of the last holdouts that currently charges 16 year old children as adults for any and all criminal offenses.

New Expunction law changes in NC effective December 2017

Misdemeanor convictions wait period reduced from 15 years to 5 years.
Felony convictions wait period reduced from 15 years to 10 years.
No more limit on number of dismissals than can be expunged.
Prosecutors and law enforcement will have access to records.

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Judgments on Credit Reports

6/3/2017

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Starting July 1, 2017 the big three credit reporting agencies will stop reporting civil judgments or tax liens in many cases. Equifax, Experian, and TransUnion will begin removing tax lien and civil judgment data from reports if the information does not provide details on consumers such as a person’s name, address, Social Security number, or date of birth. This policy change is part of the National Consumer Assistance Plan created as a result of settlement with numerous State Attorney Generals in an effort to improve credit reporting accuracy. Oversight from newly created Consumer Financial Protection Bureau likely also played a role as well.

Many States like North Carolina do not typically include Social Security numbers or birth date information as part of the public record for civil judgments. As judgments in NC are good for ten (10) years and can be renewed for an additional 10 year period this is significant news. Removal of judgment reporting means some consumers may experience a boost to their credit score in the coming month as negative items are removed from their credit report. As fixing credit report errors is often a nightmare for consumers this is a welcome change to the bureaucracy of the credit reporting industry. The Wall Street Journal is estimating this change will improve the credit score of some 12 million individuals in the United States. The expected increase is a modest 20- 40 points.