Bankr. E.D.N.C.: Carter v. B-Line, L.L.C.- Solicitation of Reaffirmations is not Debt Collection


B-Line purchased a charge account that the Debtors originally had with Kay Jewelers, which had been listed as a creditor on Schedule F of the Debtors’ petition, with a balance owing of $860.61. Following the filing of the Debtors’ bankruptcy, B-Line solicited a reaffirmation from the Debtors, including a warning/threat that “If the Jewelry purchased under this secured account have been destroyed, gifted or transferred, or sold, [B-Line] may have a non-dischargeability cause of action against you/your client(s) under 11 U.S.C. § 523.” In response, the Debtors initiated a adversary proceeding against B-Line, alleging that B-Line violated N.C.G.S. § 58-70-1 because it carried on a “collection agency business” without securing a permit through the Commissioner of Insurance before it solicited a reaffirmation agreement. Additionally, the Debtors alleged that the the solicitation of a reaffirmation agreement by B-Line was an attempt to collect a debt by the use of unfair practices “within the meaning of North Carolina General Statute § 75-1.1.

Following Jenkins v. Genesis Fin. Solutions (In re Jenkins), 456 B.R. 236 at 238 (Bankr.E.D.N.C.
Sept. 19, 2011), the bankruptcy court held that, in the absence of coercion or harassment, the solicitation of a reaffirmation did not constitute an effort to “‘collect” within the meaning N.C.G.S. §§ 58-70-1 or 75-1.1, as reaffirmations are not the traditional debt collection practices which the North Carolina General assembly was trying to regulate.


The best practice with jewelry store reaffirmations, which invariably include a threat of a non-dischargeability action if the items purchased were given as gifts, is to ignore such threats. Very rarely does a creditor (let alone a debt buyer) follow through and commence a discharge action. Even if such an adversary proceeding were brought, it would be nearly impossible for to show that it was improper to give jewelry as a gift, since gift-giving is nearly the entire basis for the jewelry industry. Once such an baseless adversary is brought, the Debtor can respond by seeking damages under 11 U.S.C. § 523(d).

For a copy of the opinion, please see:

Carter v. B-Line, L.L.C.- Solicitation of Reaffirmations is not Debt Collection.pdf


1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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