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Program helps local governments retrieve millions in outstanding debt 

by League Communications Specialist Jessica Wells

In 2015, the North Carolina Local Government Debt Setoff Clearinghouse has collected more than $15 million in delinquent debts for local governments. The best part: it costs nothing to participate.

Each year 385 local governments participate in the program, a service jointly provided by the League, the North Carolina Association of County Commissioners and Five Star Computing, Inc. Counties, municipalities, joint regional agencies, metropolitan sewage districts, public housing authorities, sanitary districts, housing and regional solid waste management authorities can all submit any legal debt of more than $50 to be recovered from debtors’ tax refunds and education lottery winnings.

Most of the debts submitted are utility debts, but other examples of eligible debts include: property taxes, parking fees, traffic citations and fire district taxes. Governments are able to submit any debt that has been delinquent for more than 60 days and active in the past three years, in most cases. An active debt is anything that has been billed within the past three years, with a 10-year requirement for taxes.

"By not collecting bad debt, the people who are paying for the services end up having to pay more for the service to make up for the ones who don’t," League Manager of Member Relations and Education Rob Shepherd said. "So, it’s important for local governments to use every tool they have to collect bad debts in fairness to those who do pay."

The Clearinghouse has collected more than $240 million since its inception in 2002. It’s simple to get started, and the sooner debts are submitted, the better. Monies are repaid on a first-come, first-

served basis, so, if a debtor owes money to another government as well, the first-filed debt will be paid in full first.

Now is a great time to start the filing process. If the debts are filed before November, they will surely be in the system in time for tax season next February, when a large portion of debts are collected.

The Clearinghouse website,, has complete instructions on how to get started. The website has all of the forms necessary, including the 2016 Online Participation Form that all participating municipalities need to submit early for tax season.

Five Star Computing makes it easy to participate by providing conference calls to answer questions and review file submissions; computer support to install, configure, and test with secure remote software; and data entry for 100 or less debts of any kind at no charge.

Local governments are encouraged to attend one of six regional meetings in September. The meetings are beneficial to current and potential participants who want to learn how the program can bring money back to their towns and how the program is working to be even more effective. Register here!

For more information about the Clearinghouse, municipal governments can email Wanda Veasey, League administrative specialist, or call (919) 715-2218. County agencies should email Lisa Nolen, North Carolina Association of County Commissioners outreach coordinator or call (919) 715-4362.