Legal Question in Credit and Debt Law in North Carolina

I am not a litigator and for debts that are your debts for which you have no valid defenses, litigation does not work becauwse whether you answer and fight or whether you do nothing the result will be the same - the creditor is more likely than not going to get a judgment against you.

Since you now live in NC, if they sued in NC then they of course need an NC-licensed attorney. Only an NC-attorney can sue.

If you did not file an answer to the complaint, then your have waived any defenses or objections. Since I have not seen the complaint and do not know how long it has been since you last paid. I do not know whether any such defenses existed. It may still be in your best interest to have the documents reviewed by an attorney as you may be able to assert them if you have a valid reason for failing to answer sooner.

A summary judgment motion is a way to resolve the case without the need for trial. In the motion, the creditor tells the court that there is no need for trial because the major facts are not in dispute. The major facts in your case are: (1) whether this is your debt or a debt you are financially responsible for; (2) that you did not pay; and (3) that it has been 3 years or less since you last paid.

If you are confident that you do not have any kind of a defense (you were properly served with the complaint, you have no statute of limitations defense and this is your debt), then there is no point in you showing up for the hearing. The judge does not care why you have not paid - the only issues are whether this is your debt and whether you have paid the amount alleged to be owed or not.

Once the judgment is entered, it cannot be enforced until 30 days have passed. Figure that the judgment will be entered on or about the same day as the hearing. In order to collect, the creditor is next going to serve you with papers called a "notice of rights to have exemptions designated" and "motion to claim exempt property." Those papers cannot be ignored. They are very important as it will preclude the sheriff from taking anything that you put down as exempt. Make sure that you include your bank account - otherwise it can be frozen.

Please at least see a lawyer to help you fill them out, whether its me or someone else. I charge $50 to go over the exemptions. You can contact me at [email protected] if interested.

If you have properly and timely filed your exemptions with the court and served them on the creditor's attorney, the creditor has 10 days (13 days as 3 days is allowed for mailing) to review the exemptions. If you do not really have any non-exempt assets and what you have set down is accurate, the creditor will not object. If that occurs, then whatever you have put down will be declared as exempt or off-limits to seizure by the sheriff. If the creditor does object, then a hearing would be scheduled by the clerk and you will get notice of it.

Once the exemptions are designated by the clerk, the papers are sent to the sheriff for execution. The sheriff does a very brief and limited search of the records to see if you have any non-exempt personal or real property. He may also look for bank accounts that can be levied upon that you did not exempt. The sheriff may also contact you and go over your exemptions, see if you have any non-exempt assets and try to coerce you into making paymeny arrangements. You do not have to let the sheriff in if he shows up at your door. Nor do you have to make payment arrangements if you cannot afford to do so. There is no wage garnishment in NC for unsecured personal loans or credit cards.

If the sheriff cannot find anything, he will return the papers (called execution) as unsatisfied. The judgment is good for 10 years, as far as being collectible. While the judgment never goes away, after 10 years it has to be renewed so that the creditor can try to collect for another 10 years. The judgment will also get bigger as it earns interest at a rate of 8% per year, but this is calculated on a daily basis.

Since this is a debt owed to a credit union, what you do about resolving the judgment depends on your circumstances. If this setback is temporary, start saving money now and hopefully, when you get at least $2000 - $3000 saved up you can see if they will settle. Settlements can be made several years after a judgment is entered - I have had situations for several clients where judgments were not settled for 3 or more years since they were entered. So judgments can always be resolved.

If you want to do so, you can also pay directly to the clerk of court. I don't recommend this - unless you pay the accrued interest and something to go towards the balance and do this faithfully every month, then you will be throwing money away and the balance will not substantially decrease. You can also make arrangements to pay the creditor directly in an agreed upon amount. In return, the creditor promises not to freeze your bank account or otherwise go after your assets. Only do this if you can again afford to make substantial payments (at least $100) per month - even at that rate, it will still take you 4 years to pay this off so I also don't recommend that you do this.

If you have other debts, you should consider filing bankruptcy, but that has its own consequences and may or may not be an option. If its something you are interested in, then you should get a consult with a bankruptcy attorney. There are many attorneys who give free consults.