You were successful in court, and the jury or judge awarded you the money that you were requesting. You have a judgment in your favor and the deadline to appeal has passed. So, now what should you do? Unfortunately, the judgment is just a piece of paper. The person or entity that you obtained a judgment against may not even have the money to pay the judgment.
In North Carolina, there are several mechanisms that can be used in order for you to collect the money that you are owed, and the procedure is going to vary depending on whether your judgment is against an individual or a business entity.
1. Judgment Debtor Entitled to Claim Exemptions
Judgment execution is the process by which you are able to enforce a judgment against the person or entity that owes you money (the “judgment debtor”). If the judgment debtor is an individual who resides in North Carolina, you are required to send the judgment a debtor a notice which provides the judgment debtor the opportunity to claim certain statutory exemptions. “Statutory exemptions” are provided for under North Carolina law and, essentially, allow the judgment debtor to claim certain property as exempt from the judgment, meaning that you won’t be able to reach that property to satisfy the judgment. For example, if the individual judgment debtor has saved funds in a college savings plan,, up to $25,000.00 of that college savings fund is exempted from being used to satisfy a judgment.
Until the judgment debtor has at least been given the opportunity to claim the statutory exemptions, no further action can be taken by you to execute the judgment. Once the debtor is served with the "notice to claim exemptions," they have 20 days to respond or else they are deemed to have waived those exemptions.
If the individual judgment debtor does not reside in North Carolina, or if the judgment debtor is an entity, the debtor is not entitled to claim any statutory exemptions.
2. Writ of Execution
Once the judgment debtor has claimed the statutory exemptions, or waived the right to do so, you must request a writ of execution from the Clerk of Court in the county in which the lawsuit took place. The Writ will be issued to the county Sheriff’s office, which will then search for assets owned by the judgment debtor which can be used to satisfy the judgment.
If the Sheriff’s office finds property that has not been claimed as an exemption, they can take the property (like repossession) and sell it to make proceeds to satisfy your judgment.
3. Supplemental Proceedings
If, after issuing a writ of execution, the Sheriff’s office search for assets belonging to the judgment debtor comes up empty, then you may undertake “supplemental proceedings” which allow you to further investigate the judgment debtor’s assets in an attempt to satisfy your judgment. For example, you have the option of asking the judgment debtor, in person and under oath, about the extent and location of the judgment debtor’s assets. If the judgment debtor refuses to answer the questions, the judgment debtor could be held in contempt of court, meaning that the judgment debtor may be fined or placed in jail.
4. Lien on Real Property
A lien on real property will prevent the judgment debtor from selling, or even refinancing, any real property owned by the judgment debtor without first satisfying the lien against that property (i.e. paying you the money that you are owed). A judgment automatically becomes a lien against real property, In North Carolina, a judgment is valid for 10 years, and it can be renewed for another 10 years if your judgment has not been satisfied.
Obtaining a judgment is often just the first step in obtaining the money that has been awarded to you by the Court. At Jesson & Rains, we are experienced in counseling our clients in the easiest and most cost effective way to secure payment of any judgment that is owed to you.
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