We have been alerted that the North Carolina Senate General Assembly has begun debating a proposed bill to amend Article 56 of Chapter 14 of the North Carolina General Statutes to be recodified as Article 9 of Chapter 75 of the General Statutes. The proposed bill is currently still considered a draft and has not been officially introduced, given a bill number, or sponsored by a North Carolina Assemblyperson.
According to the draft of the proposed bill, the purposed of the Bill is to “modernize and expand the prohibition of debt settlement by making debt settlement an unfair trade practice, clarifying the definition of debt settlement, expanding civil remedies available to debtors, limiting debt settlement acts that are authorized, and make other administrative and technical changes.”
The draft of the proposed bill amends the definition of debt settlement to no longer include mention of “receiving fees” within the definition, thereby including all debt settlement businesses who act as an intermediary between debtors and creditors for the purpose of reducing debt. This would turn North Carolina from being a green state, to an attorney-only state. The definition exempting attorneys has also been amended, but not in a way where it would affect attorneys who were practicing under the current North Carolina statute.
We will continue to follow the trajectory of the draft of this proposed bill and update you if it is officially introduced to the North Carolina Senate General Assembly. Since it has not been officially introduced to the General Assembly yet there is no action we can recommend you take at this moment.