NC House Bill 76 Q&A

Debt Relief at Risk: A Q&A About NC House Bill 76

The recent COVID-19 pandemic and economic upheaval has left many Americans in dire financial straits and looking for relief. Unfortunately, a recent bill that threatens to remove a vital debt relief option from North Carolina residents is making its way through the North Carolina state legislature. If passed, House Bill 76 could limit the choices available to constituents who are desperate for financial assistance.

Q: What is North Carolina House Bill 76?

A: With the short title “Modernize Debt Settlement Prohibition,” House Bill 76 seeks to limit accredited debt relief organizations from doing business in the state of North Carolina. This would narrow the options available to constituents who are struggling with debt, pushing many to either continue making minimum payments for years or resort to bankruptcy. Additionally, the passing of this bill would stop residents who have already chosen these debt relief programs from continuing to benefit from their services.  

Q: Why is this legislation being pushed?

A: While based on erroneous and misleading information, the General Assembly members who support House Bill 76 believe that they are acting in the interest of North Carolinian residents. Many legislators misunderstand the debt settlement industry, believing that the leaders in this space are lying to clients and acting recklessly with consumers’ money. 

While there are bad actors in every industry, those with AFCC and IAPDA affiliations always conduct their business with the consumer’s best interest in mind. North Carolina’s residents should have the right to work with trustworthy organizations such as these. 

Q: Is Debt Settlement a legal and regulated industry?

A: Yes! Regulations and laws are already in place that protect debt relief consumers, and there is nothing illegal about being in a contractual agreement with a debt settlement company affiliated with both the AFCC and the IAPDA. When the FTC amended the Telemarketing Sales Rule in 2010, they kept three fundamental principles:

  • It’s illegal to charge upfront fees
  • You must disclose certain information before signing people for services
  • You can’t misrepresent those services

Any debt settlement organization that doesn’t strictly comply with these principles is already subject to regulatory oversight and penalties for violations. The remaining organizations have missions to serve and empower people who are struggling with debt.

Q: I’m a resident of North Carolina who’s currently in a debt settlement program. What does HB 76 mean for me? 

A: If the “Modernize Debt Settlement Prohibition” bill is passed, AFCC and IAPDA-accredited debt settlement businesses will no longer be able to do business in the state of North Carolina. This means that your program will likely end early, and you will no longer benefit from the services provided by your settlement program.

Q: If debt settlement is taken off the table, what would my debt relief options be? 

A: Removing the option of debt settlement would leave indebted North Carolinians who can’t get approved for a debt consolidation loan to choose between continuing to make minimum payments or pursuing bankruptcy. 

Q: If HB 76 becomes law, who wins?

A: While many of North Carolina’s state legislatures may believe that the consumer will win in this scenario, it’s likely that bankruptcy attorneys and collections agencies will come out on top. When options are limited, consumers lose.

Q: Does debt settlement work?

A: Yes! Debt settlement not only has the ability to significantly reduce your monthly payments, but it can also reduce your overall debt. In 2018, North Carolinians received $71 million in consumer savings thanks to debt settlement. 

What does this look like on a micro level? A recent study conducted by Harvard Kennedy School found that debt settlement program participants receive an average reduction of 33.2% on their settled accounts after accounting for fees. The study also revealed that for every $1 in fees that a participant paid, they saw an average debt reduction of $2.64.

Q: What can I do to help protect the right to choose debt settlement in North Carolina?

A: All North Carolinians who believe in having the right to choose from a variety of debt relief options are invited to make their voices heard. Visit and sign the petition telling North Carolina’s legislators to say “no” to HB 76.

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