So You Have A Judgment…Now What?

Congratulations on successfully winning your case and obtaining a money judgment against the opposing party! But a money judgment alone is just a piece of paper and won’t necessarily result in money in your pocket, so what now? Most likely, the defendant/judgment debtor isn’t going to show up at your house with a check to satisfy the debt. How do you transform that piece of paper into actual money?
If you have obtained a judgment in either District or Superior Court, your ability to do anything is often limited for thirty (30) days after the judgment is entered. One step you can take is record the judgment in any county where you know that the judgment debtor has real property or assets. Your judgment operates as a lien on real property (think: land or houses), which makes it difficult for the judgment debtor to sell their property without first paying off your judgment. And, in order for a Sheriff to attempt to collect on your judgment, you must have the judgment recorded in the county where the property exists.
If you have obtained a judgment against an individual, he/she has the right to have certain property set aside as being “exempt” from execution. This means that you cannot take those assets to satisfy your judgment. Once thirty (30) days from the entry of your judgment have passed and prior to execution efforts, you must send an individual judgment debtor two forms: (1) a “Notice of Rights to Have Exemptions Designated” and (2) a Motion to Claim Exempt Property. These forms can be obtained on the North Carolina Court System’s website. Beware: these forms must be served in accordance with the North Carolina General Statutes and, if not done appropriately, can set you back in the time it takes to execute on your judgment.
Once served, the judgment debtor must complete and file the forms with the Court within twenty (20) days of receiving the documents. Failure to do so will result in any potential exemptions being waived. If the judgment debtor completes and files the forms within the time period allowed, the judgment creditor can file objections to the exemptions within ten (10) days.
After the period of claiming exemptions has expired and any objections have been resolved, the judgment creditor may request a Writ of Execution to the Clerk of Court for issuance of an Order for Execution. A writ may be issued in any county where the judgment has been recorded and is valid for ninety (90) days. Once the Order is issued, the Sheriff must take steps to locate property owned by the judgment debtor. It is always helpful to provide as much information as possible to the Sheriff to help aid in collecting on your judgment (such as bank account numbers, banking institutions, real property, vehicles or other personal property of the judgment debtor) Informal property searches such as county tax records, the county register of deeds, the DMV and social media, may prove helpful in locating asset information of the judgment debtor.
Unless it is claimed as exempt, many different types of items or property may be sold or levied on to satisfy your judgment. This includes, but is not limited to, any goods (vehicles, tools, personal property, etc.), real property and bank accounts belonging to the judgment debtor. Be aware that selling real property or vehicles often takes time and requires an up-front deposit by the judgment creditor that may not be recouped from the judgment debtor. If real property has a mortgage on it or is otherwise encumbered by a lien, the funds from the sale will be distributed according to priority – whoever had the encumbrance first will get paid first. Secured lienholders (such as the lender) will get paid first when a vehicle is sold, and remaining money, if any, will go to the judgment creditor up to the judgment amount. North Carolina does not permit wage garnishment, except in very limited situations, such as past due child support. In addition, the Sheriff is entitled to receive a percentage of the sale proceeds as a fee.
If you and/or the Sheriff are unsuccessful in fully satisfying your judgment during the 90 day execution period, don’t worry! Your judgment is good for ten (10) years, and may be extended for an additional ten (10) years. After the first unsuccessful Writ of Execution, other actions may be taken, such as sending written questions or asking the Court to order that the judgment debtor appear and testify under oath regarding their assets.
The process for collecting on your judgment often takes a substantial amount of time, and investigative work into the assets of the defendant/judgment debtor. Much of the process is guided by statute and must be strictly followed. The attorneys at Law Firm Carolinasare experienced not only in helping you obtain your judgment, but in helping you collect on your judgment. Contact us today for assistance.