Enforcing Civil Judgments in North Carolina
Obtaining a judgment, which gives a party the right to collect payment from another party, is something to celebrate, but it does not always mark the end of the long process of litigation: That process only ends when a judgment is collected. The person or business you successfully sued is not always willing to voluntarily pay the judgment, so it might take some legwork on the part of the judgment creditor (you) and an attorney to obtain what is rightfully yours.
Here, we discuss the general process of enforcing civil judgments in North Carolina.
An Overview of Judgment Execution
The process of collecting a judgment is called “judgment execution” in legalese. To collect on a judgment, the person or entity against whom the judgment was entered (the “judgment debtor”) must own property in the county in which the judgment was entered. If he does, a sheriff’s deputy in that county will attempt to enforce the judgment by seizing the judgment debtor’s property and selling that property to pay for your judgment.
The process of judgment execution is lengthy and often fraught with hurdles: Judgment debtors often dodge judgments by moving out of town or flying under the radar once they know a sheriff’s deputy is after them. Not to mention, many judgment debtors are simply “judgment-proof,” meaning they don’t own any property or have funds upon which you can draw. Others may have some property but it may be subject to claims by other creditors, for instance, the all-too-common example of a vehicle encumbered by multiple liens. If this is the case with your judgment debtor, unfortunately, you will simply have to sit in line behind the other creditors and may ultimately be left empty-handed.
What Property Is Exempt From Judgment?
First, if the judgment debtor is a person (i.e., not a business) who lives in North Carolina, he is entitled to claim certain statutory exemptions. These exemptions allow judgment debtors to designate property to shield from the judgment. For example, in North Carolina, a judgment debtor may exclude from collection up to $5,000 in personal property such as household goods, as well as retirement accounts, among many other assets.
Only individuals who are residents of North Carolina may claim these statutory exemptions, so if your judgment debtor is an entity such as a corporation or a person who is not a resident of North Carolina, these exemptions will not apply. Additionally, the judgment debtor has to affirmatively claim these exemptions – they are not automatic. If he fails to do so, you are free to proceed with your collection efforts.
The Writ of Execution
After the exemptions are established, or a court determines that none are applicable, a “writ of execution” will be entered in the county in which the judgment debtor’s property is located. This writ of execution directs the Sheriff’s Office to identify assets, seize them, and sell them at an auction, with the proceeds paid to satisfy the judgment.
If a sheriff’s deputy is not able to locate property within ninety days, or there is not enough property to satisfy the judgment, the writ will be considered unsuccessful, and you will need to apply for a second writ to extend the period for another ninety days.
If the judgment debtor successfully ducks attempts to collect on the judgment, you have options – but they may be more complicated and require additional litigation (and legal fees). Some judgment creditors choose to file an action for supplemental proceedings, which allows a court to summon the judgment debtor to appear and answer questions about his assets and liabilities. This may involve a separate discovery process, much like the one you may have navigated in the originating litigation.
Judgments are good for ten years and may be extended for an additional ten years. Although not always ideal from a cost-benefit perspective (you may ultimately spend more in legal fees than you are owed), you can continue to take action and seek to collect on your judgment for many years. For example, if a judgment debtor acquires new property in the county in which your judgment was entered, you can attempt to seize and levy it to satisfy your judgment.
Collecting on Foreign Civil Judgments in North Carolina
Not every lawsuit that results in a judgment will take place within North Carolina. Sometimes business is conducted across state lines or with out-of-state individuals. If a lawsuit is filed in another state and a judgment is entered against a defendant who resides in North Carolina or who has property in North Carolina, you can still enforce your judgment. If a judgment debtor resides in North Carolina or has assets in North Carolina, a judgment can be enforced in North Carolina, even if the judgment was entered in another state. The process is called “domestication.” This domestication process is governed by specific rules and legal requirements.
Will My Judgment Ever Be Satisfied?
Enforcing a judgment can be an arduous process. After coming down from the high of winning a lawsuit, reality sets in and work needs to be done to collect on your judgment. Our experienced attorneys can assist you in obtaining a judgment and, most importantly, fighting on your behalf to collect on that judgment. We take pride in offering the very best legal counsel and working with clients to devise the best strategy for their cases. We regularly serve clients across North Carolina and help them pursue money they are owed after a judgment has been entered. Contact us to learn more or to set up an initial case review.
This article does not establish an attorney-client relationship and must not be construed as legal advice.