Just Chatting A Bit About Judgments


Your civil case has ended and you have won (or, unfortunately, you may have lost).

A judgment has been entered. So now what happens?

In North Carolina a judgment is good for 10 years and can be renewed one time for

another 10-year period. A judgment becomes a lien against any real property

owned by the debtor (person against whom the judgment exists) and it can also

impair the debtor’s ability to obtain loans, mortgages, and other forms of credit.

Judgments often appear on the debtor’s credit report.

 

When a judgment is granted the creditor (the person entitled to recover money from

the debtor) is limited to seeking collection in the county in which the judgment was

obtained. In order to collect on a judgment outside of the county the creditor must

have the judgment docketed in the other jurisdiction(s) (ex: county, state, country).

The docketing process can be complicated especially when the creditor seeks to

enforce a North Carolina judgment in another state. It may be advisable to consult

a lawyer for help with this aspect of judgment collection.

 

Even after a judgment is in place the debtor can still enter into an agreement with

the creditor to settle the judgment for amount less than face value. The creditor is in

the driver’s seat, however, and is not required to enter into any payment agreement.

The judgment entitles the creditor to have payment in full made in one lump sum but

there are often good reasons for a creditor to accept less than face value.

 

The process of collecting on a judgment is called execution. In North Carolina

executions involve a judgment personally serving the debtor with a Writ of Execution

and taking steps to identify and seize money, property, and other assets that can be

used to satisfy the judgment. The law allows the creditor to obtain information and

documents from the debtor regarding the existence and value of assets that could

be used to satisfy the judgment. The creditor can even command the debtor to

appear in court at a hearing to produce documents and answer questions regarding

assets and ability to pay the judgment. A debtor may be required to produce tax

records, pay records, and other financial documents.

 

In North Carolina before the creditor can execute on the judgment she must serve

the debtor with notice of the right to claim certain property as exempt from any

judgment. State law designates a certain monetary value of real property and

personal property (including motor vehicles) that a debtor can shelter from being

taken to satisfy a judgment. Once a debtor is served with the notice of rights she

has 20 days to complete and return a Motion to Claim Exempt Property form to the

creditor. Failure to meet this deadline could result in a waiver of exemptions

meaning any and all of the debtor’s property is subject to being seized and sold to

satisfy a judgment.

 

The rules and procedure regarding judgments can be complicated. Whether you

are a creditor or debtor one of the best moves you can make is to consult with an

attorney in the early stages of the process. Ideally you should consult an attorney

either before you file lawsuit or immediately after being served with a lawsuit.

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1 Comment

  1. Jeff A

    Awsome, succinct article, John. I am sure it would be very helpful to anyone trying to enforce a judgment. One additional thing that may be helpful to your readers, which I am sure you already know: a judgment automatically becomes a lien against real property owned by the judgment debtor only IN THE COUNTY WHERE THE JUDGMENT WAS RENDERED.

    If you have a judgment from a court in Guilford County and you know the judgment debtor owns real property in, for example, Forsyth County, you must docket the judgment in Forsyth County before the judgment lien attaches to the real property located in Forsyth County.

    Keep up the great work! Peace to you, my friend.

    Jeff A.

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