Legal Question in Bankruptcy in North Carolina

Your personal relationship to the creditors is governed by the documents that create the debt. In short, if you signed for debt or signed as guarantor for the debt of the LLC, the creditor can bring suit and, following judgment, attach wages as well as cause the issuance of a writ of execution to attach personal property. This is all technically true. As a practical matter, the creditor is prohibited from issuing threats regarding remedies without telling you that it must first sue and take judgment. Scare tactics which imply the power to garnish wages and take personal property are actionable under federal and state collection laws. Assuming that judgment has been taken and the threats are legit, it is also a violation of collection laws to make threats of legal action that they do not intend to carry out. On the other hand, if licensed in NC the creditor can use collection activity, including suit, judgment, garnishment etc. NC law, however allows exemptions from levy pursuant to writ of execution. If judgment has been rendered, and execution directed to the sheriff, you will receive the affidavit of exemptions which allows you to list and keep, free from execution, property listed in the statutes. A lawyer will help you fill in the exemptions, which by the way, are exactly the same ones used in a federal bankruptcy filing. The best way to sort out your rights and devise a plan to deal with the LLC debt is to consult a bankruptcy counsel and go over each creditor. It could be that for some, you can tell them to brush off, others, negotiate a deal, others yet deter activity with retaliation for their collections sins and for others just ignore until they get close enough to do harm. Of course, a bankruptcy filing will extinguish all personal obligation for LLC debt and give you a fresh start. Again the whole picture must be evaluated to work up a plan to put the LLC episode behind you for good.