Real estate can be exempted in North Carolina
Notice of Right to Have Exemptions Designated
After a creditor obtains a judgment against an individual in North Carolina, the next step in the collection process is to serve the Defendant with paperwork titled “Notice of Right to Have Exemptions Designated.” This paperwork usually arrives via sheriff or certified mail.
Act Quickly to protect Your Property
If you are served with this paperwork then you must act quickly to preserve your rights. How quickly must you act? Well, if you do not file a written response at the Courthouse within twenty (20) days then you waive your right to claim the exemptions available under the Statutes of North Carolina. These exemptions are actually quite broad and may protect all or most of your property and assets.
Items subject to Seizure in North Carolina
Far too often clients tell me they have nothing to take, but that is usually not correct. Although North Carolina Judgments generally do not result in wage garnishment, many items are often subject to seizure such as:
- Land or House (even is still making payments)
- Car (even if still making payments)
- Bank Accounts (regardless of balance)
- Future Inheritance (how many judgments are eventually paid)
- Almost anything else
You may ask why a judgment creditor would take a car that is worth less than what is owed. Well according to a creditor attorney at one of the largest collection firms in North Carolina the answer is: because they can. Practically speaking, taking stuff often gets the attention of debtors, pushing them into making payments. Judgment creditors have the added advantage of knowing a North Carolina Judgment is good for ten (10) years and can be renewed one (1) time for an additional ten (10) year term, meaning a North Carolina judgment can last for 20 years.
Get Help From an Attorney
So what should be done if served with the Motion to Claim Exempt Property? Best practice is to have an attorney assist you filling out the paperwork so nothing is exposed that could be covered by allowable exemptions. If attempting to fill out the paperwork on your own, make sure everything is properly listed. The form itself offers some guidance as a template, but do not forget to list bank accounts, as there is no designated place on the form for them. The following is a list of commonly used exemptions, but does not represent a complete list:
1. Residence: $35,000.00 equity per individual debtor, $70,000.00 for joint debtors (Equity= Current value minus loan payoff)
2. Automobile: $3,500.00 equity
3. Wildcard: $5,000.00 per debtor (Can be stacked with automobile exemption)
4. Household Goods: $5,000.00 per debtor
5. Tools of the trade: $2,000.00
6. Life Insurance- may be 100% exempt
7. IRA- may be 100% exempt
8. Pension or 401K- may be 100% exempt
9. Personal Injury proceeds- may be 100% exempt
10. Earnings in the last 60 days necessary for support of family
My next article will focus on what to do when served with a North Carolina lawsuit.
Image credit: hdescopeland
How many times can the creditor file the same judgement against a debtor? Can the creditor just keep refilling the same judgement? Is there a time frame?
In NC a judgment is good for 10 years and can be renewed 1 time for an additional 10 years.