Debt collection is the process by which a person or entity who is owed money or property seeks payment for the debt. Debt collection may be performed by the person or entity who is owed the debt (the creditor), or may be performed by a third-party debt collector hired by the creditor to collect the debt on behalf of the creditor. Sometimes creditors sell the debt to another entity at a discounted value, and the entity that purchases the debt becomes the creditor.

Debts that are often the subject of debt collection efforts include (1) credit card debt; (2) car or auto loan debt; (3) medical debt; (4) student loan debt; (5) unpaid utility and telephone bills; and (6) personal loan debt.

If you owe money, you have a legal obligation to repay it. But state and federal laws—such as the Fair Debt Collection Practices Act—prohibit debt collectors from using deceptive or abusive tactics to collect the debt.

In North Carolina (NC), debt collection is regulated by both state statutes and federal law. The federal Fair Debt Collection Practices Act (FDCPA) sets the standard for how debt collectors can operate, prohibiting deceptive, abusive, or unfair practices. Under the FDCPA, collectors are restricted in their communication with debtors, such as limiting the times they can call and prohibiting contact at the debtor's workplace if it's known to be inconvenient or prohibited by the employer. Debt collectors must also provide a validation notice to debtors, detailing the amount of debt and the creditor's name, and inform them of their right to dispute the debt. North Carolina's Debt Collection Act (NCDCA) complements federal law and provides additional protections. For example, it prohibits collectors from claiming, attempting, or threatening to enforce a debt when they know it is not legitimate, and from misrepresenting the amount or legal status of the debt. Creditors who collect their own debts are generally not covered by the FDCPA, but they are subject to the NCDCA and must adhere to similar standards of conduct. Additionally, North Carolina law caps the interest rate that can be charged on debts and requires debt collectors to be licensed. It's important for debtors to know their rights and for debt collectors to follow these regulations to ensure fair and lawful debt collection practices.