Legal Question in Credit and Debt Law in North Carolina

Re: Judgement and St. of Limit.

The statute of limitation on most unsecured debt in NC is 3 years. You correctly assume that the last payment can trigger the statute of limitation, but you also need to consider the terms of your contract and any modifications that may have occurred (i.e., creditor verbally agreed to a payment plan, contract says account is not past due until payment is 30 days late, etc.)An accurate judgment about the statute of limitation can only be made by a lawyer.

A judgment for unsecured debt stays on your record for 10 years. They can renew the judgment for another 10 years, and so on. A creditor can initially "look back" for assets from the date they initiated the lawsuit. If they can prove you were hiding assets for fraudulent purposes, they possibly go further back.

If you have no assets, a creditor can put a judgment in the public record and your credit report, ask you to claim your exemptions, and have the sheriff contact you once a year until the judgment is paid. There is no wage garnishment in North Carolina for unsecured debt. Your wages are exempt for 60 days after you are paid, so it is often difficult for a creditor to attach a checking acount. The amount of assets you can "exempt" from execution (protect from your creditors) depends on whether your judgment was rendered before or after January 1, 2006. In general, you can protect a certain amount of real estate and/or a mobile home, depending on whether the debt is joint with your spouse or not; each debtor can protect one car with a limited amount of equity; tools of your trade are protected with limitations; your interest in household contents is protected with limitations; life insurance is protected so long as it is payable to a spouse or children; retirement accounts, disability and personal injury payments are generally exempt. If your assets are all exempt, the Sheriff will ask you how you intend to pay the judgment, but will not be able to take any of your property.

In order to claim your exemptions you must return the "Motion To Claim Exempt Property" within 20 days after your creditor serves you with the forms. If you do not timely file a response with the Clerk, you waive your exemptions. It is best to at least consult with a lawyer before you file your exemptions, to be sure you are protecting the most property you can, and to understand how to fill out the forms correctly.