Legal Question in Credit and Debt Law in North Carolina

Credit card companies cannot do anything until they get a judgment against you. The judgment, in and of itself, is nothing more than a piece of paper which says you owe the credit card money. However, it is the effects of the judgment which are important.

Once entered and 30 days have passed since the date of entry, the judgment acts as a lien on any real property that you own. That means that if you go to sell or refi, the lien has to be paid. Unless you own the property free and clear or have a lot of equity (more than $30,000), the judgment creditor probably will not force a sale.

Your bank account can be levied upon unless you specifically exempt it. To claim your exemptions, you will be served with forms called a "notice of rights" and "motion to claim exempt property." Those forms are very important and must be filled out. If you don't fill them out and claim your bank account on them, then the judgment creditor can go after any non-exempt assets including your bank account.

Many debtors ignore papers until one morning they wake up and go to use their ATM card and find out that their bank account is frozen. Don't be that guy/gal. Knowledge is power. Even if you cannot pay your debt today, you can start positioning yourself and protecting as much of your assets as possible so that you are ready when the judgment happens.

You need not wait until a judgment is entered to act. Debts can be resolved at any time - before litigation, during litigation or after judgment. However what action you take will depend on the debt (if owed by a junk debt buyer or original creditor), whether you have any defenses (like the statute of limitations), your circumstances and what you want to do about the debt.

I hope that you are not talking to a debt collector who is trying to scare you into making a payment that you might regret. I give free email consults and charge $50 for a 30 minute phone consult. Please contact me or another attorney to review your situation and discuss your options. You can contact me at [email protected] if interested.