Bill Summary for H 561 (2023-2024)

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Summary date: 

May 3 2023

Bill Information:

View NCGA Bill Details2023-2024 Session
House Bill 561 (Public) Filed Monday, April 3, 2023
Intro. by T. Brown, Howard, Bradford, Carney.

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Bill summary

House committee substitute to the 2nd edition makes the following changes. Amends the definition of claim set forth in GS 1H-2 (definitions provision of Coerced Debt Relief At) to mean a right to payment for any debt, excluding secured debt, whether or not that right is reduced to judgment. (Was, a right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, or equitable.) Adds defined term secured debt (an obligation for which the payment or performance of is secured by a security interest in real or personal property. Any actions for collection to obtain a final judgment, an order for possession of collateral securing the debt, or to collect any deficiency balance owing after the liquidation of collateral pledged to secure the debt are included in this definition.) Makes conforming changes to account for new term.

Amends GS 1H-3(c) to now specify that new GS Chapter 1H does not apply to any debts that have been reduced to a civil judgment or other court order.

Deletes provisions in GS 1H-5(e) and (f), requiring a debtor to provide notice to a claimant if they are going to file a lawsuit or other action against the claimant in connection with the coerced debt 30 days before filing suit. Deletes provisions preventing a debtor from filing an action against a claimant if the claimant informs the debtor that it has ceased all efforts to collect on the particular debt, or portion thereof, identified in the debtor’s pre-suit notice, discussed above, and the debtor receives a written notice of cessation before the expiration of the 30-day time period discussed above. Makes conforming changes to account for deleted subsections.

Deletes content of GS 1H-6 (providing for complaint counterclaim against a claimant by debtor). Replaces it with content that allows a debtor to assert a coerced debt as an affirmative defense in an action to collect a debt.  Requires that the allegations of a coerced debt be pled with particularity with attached supporting documentation. Specifies that a debtor who files knowingly false motions, pleadings, or other papers or engages in other tactics that are frivolous or intended to cause unnecessary delay against a claimant will be liable for the claimant's attorney's fees and costs in defending the lawsuit.