Legal Question in Credit and Debt Law in North Carolina

First, do you owe the debt? Has it been more or 3 years since you last paid on the debt? The answer will depend on what you do. You do not indicate when you received the summons and complaint. A court date is not set up for that. Assuming that you filed an answer, if you admitted the debt, the creditor will motion for summary judgment. The motion will have a court date. If you owe the debt, it really does not matter whether you appear or not, provided that the creditor provided proper evidence of the debt (copy of the finance contract and proof of default).

If a judgment is entered against you by whatever means, it means that there is a piece of paper on file at the courthouse which indicates that you owe the creditor a certain amount of money. The money will earn interest at a rate of 8% per year. The judgment is good for 10 years and can be renewed for another 10 years.

The judgment itself does not matter but will be reported on your credit report. However, the judgment gives the creditor the right to collect their money. They do this via a process called "execution." Luckily in NC there is no wage garnishment. However, creditors can and will take over things, depending on what you have. In order to collect, the creditor first serves you with a notice of rights and motion to claim exempt property. This is a very important document! Do not ignore it.

The notice and motion is good for 90 days. It can be renewed for another 90 days. This costs money and it is unlikely that it will actually be renewed more than once per year.

You have to fill out this property to claim your exemptions, i.e., to keep your property from beinng seized by the sheriff. Failure to fill out the exemptions will result in their waiver. In many cases, all of a debtor's property is exempt and the sheriff gets nothing. A warning though - the creditor can and will levy on a bank account. Do not keep much money in your account once a judgment is entered.

If you want to resolve the debt, this can ve accomplished in several ways:

(1) you can pay the money to the clerk of court directly. when you have paid the judgment in full, the clerk will mark it satisfied. WARNING: if you do this, make sure that you pay enough of the interest and something towards the principal regularly so that the interest will go down.

(2) enter into a written agreement with the creditor that if you promise to pay every month, they will promise not to execute on your bank account and other property;

(3) negotiate a settlement, either lump sum (if you save up the cash) or term (if you can pay money over time); or

(4) bankruptcy is always the option of last resort.

I do not know how much you owe or your circumstances. If you wish to discuss some strategies regarding asset protection, review of your exemptions or settlement of your debt for a fee, please contact me.

Rachel Hunter

Attorney at Law

[email protected]

(678)-687-9693

Admitted in GA, PA & NC