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Can a judgment creditor levy bank account without warning in NC?
Anonymous10 views2 answers
If i have a judgment against me in North Carolina, do I have a chance to designate my bank account as exempt under a wildcard exemption rule? I understand that if I do not use the $35,000 homestead exemption to protect a real estate, I can use up to $5,000 to protect any property, including funds in a bank account. What I want to know is - does the creditor who has won a judgment against me automatically get the right to levy my account or they have to serve me with a notice where i get a chance to exempt my bank account. One person has told me that they do not have to serve me with anything and can go ahead and seize my account, but as i am reading the NC general statutes, it seems like this type of action is not legal. [§ 1C‑1603. (a)(4)] thanks
If the judgment is against you, individually, then the judgment creditor must serve you with a notice and motion to claim certainty property as exempt before attempting to execute. If you fail to file the motion with the court, then all of your assets become subject to seizure whether or not they could have been exempted. Whether or not your bank account can be exempt really depends on what you own and how your assets are held. So, the short answer is no, if the judgment is against you as an individual, then you must be given the chance to exempt certain property before your accounts and property can be levied to satisfy the judgment. If, however, the judgment is against a business entity, then there is no such right to claim exempt property.
Good luck and if you are served with a notice and motion to claim exempt property, you may want to consult with a lawyer to help you fill out the paperwork properly.
The party who wins a lawsuit can collect (or “execute”) on the judgment awarded. He or she can ask a county sheriff to seize the losing party’s property and sell it or to levy on the losing party’s bank account. North Carolina law, however, allows each losing party (known as a “judgment debtor”) to keep a certain amount of money and property safe from judgment collection.
North Carolina’s safe amounts, known as “exempt property” or “exemptions” include the following:
1. $35,000 in equity in a residence (or $60,000 if the residence was owned with a now-deceased spouse);
2. To the extent that you do not use the $35,000 residence exemption, then up to $5,000 in equity in any property of whatever type--INCLUDING money in bank accounts;
3. $3,500 in equity in any one vehicle;
4. $5,000 in equity in household goods, plus $1,000 household goods for each dependent, up to a maximum additional amount of $4,000;
5. $2,000 in equity in tools or equipment that are used in a business or trade;
6. Health-related items, such as hospital beds, scooters, and the like;
7. Certain investment property, including certain life insurance policies, certain retirement plans, and certain college savings plans;
8. Money that comes from personal injury settlements, alimony, child support, TANF/Workfirst, workers’ compensation benefits, and sixty (60) days worth of your wages or earnings used to support the family.
In addition, federal law protects money that comes from Social Security, SSI, and Veterans’ Benefits.
When only one spouse is a judgment debtor, but both are owners of the residence, the residence may be entirely exempt. The judgment debtor should have an attorney review the deed to the residence to provide an opinion on whether the residence owned by a judgment debt or and his or her spouse is entirely exempt.
When only one spouse is a judgment debtor, but both are co-owners of personal property, such as a vehicle, the judgment creditor may only execute on the non-exempt equity that the judgment debtor holds in the personal property.
For more information, review the exempt property laws at
http://www.ncga.state.nc.us/EnactedLegislation/
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The judgment debtor should also be sure to list as exempt any money in bank accounts that match the types described in item #8 above. All bank accounts and exempt amounts must be listed in the motion to designate exempt property in order to keep them safe from execution. Motions to designate exempt property are public records, so it is best to avoid using bank account numbers; my experience has been that listing bank name and account type and amount are sufficient.
