• 73°

Rep. Howard leads bill to protect debtors in COVID-19 pandemic

By Liz Moomey
liz.moomey@salisburypost.com

SALISBURY — The N.C. House Economic Support Working Group, led by a local representative, met Tuesday and discussed a bill that would provide relief to debtors during the COVID-19 pandemic.

The bill, titled Modernize Debt Settlement Prohibition, was sponsored by Reps. Julia Howard, R-77, Jason Saine, R-97, and Michael Wray, D-17. The three are co-chairs of the group.

Greg Roney, a legislative analyst, said the bill changes a current law that states it’s a criminal offense for debt adjusting and debt settlement. Debt adjusting is taking money and promising to pay it to someone else’s creditor. Debt settlement is going between the debtor and creditor to negotiate on behalf of the debtor. Both are misdemeanors under current law.

Roney added the proposed bill will make it clear the attorney general has all authority to stop this activity and it helps the debtor who might want to sue.

Wray said debtors are being preyed upon during pandemic, as people are applying for funding and going through traditional banks and non-traditional banks.

The group was provided four debt settlement claims from North Carolinians, including one from China Grove. Personal identifying information was redacted to protect the privacy of debt settlement victims.

The China Grove resident filed a complaint stating they have paid $12,464 for debt settlements of eight accounts. The person stated they have upheld their end of the agreement and made payments on time, which would “accomplish my debt settlements.” The resident had settlements with three accounts and three summons from three other accounts.

“Now not only do I have credit card debt to settle, I also have judgments that can lead to liens against my property and there will be court costs that I will be responsible to pay,” the China Grove resident wrote. “What started out, to me, as a solution to help consolidate my debt has turned into a scam to take as much money from me as possible with no results in diminishing my debt.”

Howard said legislators found there was certainly a need for this bill.

“I think the certain influx of moneys now (and) people incurring debt is certainly something we need to look at and pass,” she said. “I hope we can do that.”

Rep. Harry Warren, R-76, was in favor of the bill, saying it cleans up a lot of things.

Warren questioned the fee cap section of the proposed bill. It stated organizations that provide services to debtors have to charge no fee or, alternatively, a fee to cover the cost of administering a debt management plan not to exceed $40 for origination or setup of the debt management plan and 10% of the monthly payment disbursed under the debt management plan, not to exceed $40 per month.

Roney said the current law has this language, but it was under definitions. Now it is under a “white hat list,” which gives the organizations a list of items they must have to assist debtors. It also adds a no fee option.

Warren made a motion for the bill to be filed and taken up next week when the General Assembly meets in full.

Comments

Education

Back to School: Calendars

Education

Back to School: Getting to know local schools

Education

Back to School: A message from RSS Superintendent Lynn Moody

Education

Q&A with Summit Academy Principal Amy Pruitt

Education

Lessons for the fall from a spring of remote preschool

Back to school

Back to School: Basic supplies needed

Back to school

Back to School: School bus safety

Education

Back to School: New COVID-19 precautions will be in place across the district

Local

City lifts moratorium on utility disconnections; will continue to explore options for outstanding debt

East Spencer

‘This is our lifeline:’ East Spencer officials ask Salisbury for water billing credit to aid in economic development

Coronavirus

Autumn Care becomes newest site of COVID-19 outbreak

Education

Rowan-Salisbury Schools asking parents to find alternatives to school buses

Local

Salisbury license plate office sets record straight on long lines

Business

Utility cutoffs could begin this month in Landis

Crime

Man held in contempt of court for not wearing mask, disruption

Local

Business, assembly, mask mandates extended longer in NC

Education

Education briefs

Education

Education shoutouts

Crime

Police: Woman reports car stolen with keys in the ignition

Local

Former Editor Cook to lead special gifts for 2020 United Way campaign

Crime

Vandals spraypaint wall at Salisbury National Cemetery

Local

State responds to plea for transportation museum’s reopening

Education

NC wins federal grant to improve instruction during school disruptions

Coronavirus

Recoveries rise in addition to 29 new positives