• DYE CULIK PC | Consumer Protection Division

Sued by a Debt Collector? What You Can Expect in a North Carolina Debt Collection Lawsuit.

Updated: Jan 22

If you recently received a notice that you are being sued by a debt collector in North Carolina, you may be wondering what the court documents you received are. You may also be wondering what the next step is in you debt collection case. This post answers those questions.

Debt collectors file many, many lawsuits in the North Carolina courts. By some estimates, debt collection lawsuits are the most common type of lawsuit. Some are brought by original creditors, who are the banks or institutions that originally loaned money. Some are brought by debt buyers, which are companies that buy bad or defaulted debts in order to collect.

Whatever the case, the rules that apply to any debt collection lawsuit are the North Carolina Rules of Civil Procedure, or the Rules, for short. The Rules are contained in Chapter 1A the North Carolina General Statutes.

The initiating document in a debt collection lawsuit is a “complaint.” Rule 3 says that “A civil action [i.e., a lawsuit] is commenced by filing a complaint with the court.” This means that the debt collector drafts the complaint and files it, at which point the court creates a file and assigns it a file number.

The plaintiff in a debt collection lawsuit (and any other lawsuit) is the person who filed the complaint. The defendant is the person who is being sued. In most debt collection cases the alleged debtor will be the defendant.

What is a complaint? The Rules provide an answer. Under Rule 8, the complaint must contain “[a] short and plain statement of the claim sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved showing that the pleader is entitled to relief.” This means that the complaint just needs a short plain statement about what happened.

The complaint doesn’t need to include all the nitty gritty details, but it does need to put the defendant on notice of what the case is about so that they can respond. In most debt collection lawsuits, the allegations will involve alleged non-payment of a credit card, loan, medical bill, or other account. This is normally done by using numbered paragraphs throughout the complaint, each paragraph containing a separate sentence or allegation.

The complaint is usually served by the county sheriff, who also serves what is called a summons. What is a summons? Again, the Rules answer this question. Rule 4 says that a summons is a document that contains, among other things, the name of the court, the county, the names of the plaintiff and defendant, and the file number. Perhaps most importantly, the summons contains a notice that the defendant must respond within 30 days. Failure to respond within 30 days results in the plaintiff being able to obtain a judgment against the defendant, usually without providing any documentation. The state court system uses a preprinted form for North Carolina summonses.

It is therefore vitally important that defendants in debt collection cases note when the sheriff served them with the summons and complaint. This is how a defendant knows when they have to file their answer to the collector’s complaint.

The defendant’s response to the complaint is called an “answer.” Rule 8 tells us that, like with a complaint, the answer must “state in short and plain terms his defenses to each claim asserted.”

The rule says that if a defendant does not have “knowledge or information” that would allow them to admit or deny the allegations, they can say so, and that this has the same effect as a denial. In practice, the defendant’s answer responds paragraph by paragraph to the numbered paragraphs of the debt collector’s complaint, admitting, denying, or stating that they do not have information that would allow an admission or a denial.

Some debtors who try to handle cases on their own make the mistake of only sending their answer to the debt collector’s attorney. Rule 5 says that any time the plaintiff or defendant files a document, it must be sent to both the other party and the court. Each document must also contain a “certificate of service,” which tells the court that the document was served on the other party.

Once the defendant has served their answer to the complaint, the lawsuit proceeds. Sometimes a settlement is achieved, though more often the parties begin the process of discovery. Discovery is the exchange of documents, and the depositions of witnesses.

Typically, a trial is not held until after discovery is completed. It may be months from the time the lawsuit is filed until it actually goes to trial. With some debt collectors, the best practice is to settle. With others, it is better to take the case to trial. This is especially important with debt buyers who often have little or no documentation of the debts they purportedly own.

There are separate requirements for debt buyers. We outlined those in a separate post called What Documents do Debt Buyers Have to Produce To File a Debt Collection Lawsuit in North Carolina?

Hopefully, this post has given you a better idea of what is supposed to happen according to the Rules of Civil Procedure in the initial stages of a debt collection lawsuit. However, we have barely scratched the surface of what is involved in a typical debt collection lawsuit. There are numerous issues that may occur, or strategies and tactics that can be undertaken.

If a debt collector sent you a summons and complaint for a collection case North Carolina or Massachusetts, contact us at 800-704-4214 to see how we can help. We have represented individuals and businesses in hundreds of debt collection cases. DYE CULIK PC is a consumer financial protection law firm with offices in Massachusetts and North Carolina. Our attorneys represent clients to champion their rights and to make debt collectors prove what they are required to provide under the court rules.