Frequently, all of it. The same North Carolina exemptions which protect certain property in a bankruptcy filing also protect a consumer’s property if they never file a bankruptcy case. This renders many consumers “judgment proof,” meaning that the judgment creditor may not seize their property and sell it in order to pay off the debt. There is no wage garnishment in North Carolina for simple unsecured debts: credit cards, medical bills, personal loans, mortgage deficiencies, etc. Debts owed to the federal government, usually tax debts or student loan debts, can be subject to wage garnishments.
Pause and Regroup
Many consumers become terrified when they get served with a collection lawsuit, and freeze. However, once served with a lawsuit, it is important to get professional advice about your next steps forward. Several bankruptcy attorneys offer free consultations in the Asheville area – sign up for a free bankruptcy consultation with me here. OnTrack Financial is another great resource located in downtown Asheville where low cost or free advice can be found. Pisgah Legal Services offers free legal advice to consumers who qualify for their programs. The point is that advice is available locally to those who seek it in Western North Carolina, and costs should not limit a consumer’s ability to become informed about their rights.
Notice of Right to Claim Exemptions
After a judgment is achieved against a consumer, the creditor must serve a “Notice of Right to Claim Exemptions” before trying to seize any property. A consumer has 20 days to return that form to both the creditor’s attorney and the clerk of court. If the consumer fails to return the form within 20 days, they have waived their exemption rights, and the creditor can then begin to seize any of their property to get paid on the debt. If you have received this notice, you should take immediate action to protect your family’s property.
If you have questions about how North Carolina’s exemption statutes work, or would like advice on your best financial options moving forward, contact my office to arrange for a consultation.