Creditor and debtor law includes the rights and obligations of (1) creditors who extend credit and make loans to consumers and businesses and (2) consumers and businesses who seek credit and loans for their personal and business finances. Creditor/debtor law consists primarily of state and federal statutes.
In North Carolina, creditor and debtor law is governed by a combination of state statutes and federal laws that outline the rights and obligations of both parties in credit and loan transactions. State laws include the North Carolina Consumer Finance Act, which regulates consumer loans and requires licensure for consumer finance lenders. The state also follows the Uniform Commercial Code (UCC), which governs commercial transactions. On the federal level, laws such as the Fair Debt Collection Practices Act (FDCPA) protect consumers from abusive debt collection practices, while the Truth in Lending Act (TILA) requires creditors to provide clear and conspicuous disclosures about the terms and cost of credit. Bankruptcy proceedings, which can discharge or reorganize debts, are governed by federal law under the U.S. Bankruptcy Code. These laws work together to balance the interests of creditors seeking to collect debts and debtors seeking to manage or discharge their financial obligations.