Motion to Claim Exempt Property: Why Bother?
If a creditor has a judgment against an individual in North Carolina and is seeking to execute the judgment in North Carolina, that creditor will need to serve the judgment debtor with a Notice of Right to Claim Exemptions. Upon service, the judgment debtor has the right to file a MOTION TO CLAIM EXEMPT PROPERTY. Completing and timely filing this form can protect some or all of your property from being subject to the judgment creditor’s claims. Below, is a discussion regarding this important motion to claim the exempt property in NC and how a judgment creditor can complete it.
What Is a Motion to Claim Exempt Property in NC?
If a creditor obtains a court judgment in North Carolina or transcribes an out-of-state judgment into North Carolina, a judgment execution can occur under North Carolina law. A judgment is valid under North Carolina for ten years and accrues interest at 8%. A judgment can be renewed for one additional ten-year period. In certain circumstances, a judgment can be a lien on real estate owned by the judgment debtor. A judgment execution is where non-exempt assets can be seized by the sheriff and liquidated to apply the funds against the money judgment. A bankruptcy filing can stop a judgment execution. Before issuing a Writ of Execution, the judgment creditor must serve the individual judgment debtor with a NOTICE OF RIGHT TO HAVE EXEMPTIONS DESIGNATED. This notice describes your rights to exempt certain property so that the creditor cannot take it from you.
This notice states: “It is important that you respond to this Notice no later than twenty (20) days after it was served on you because you will lose valuable statutory rights if you do nothing. If you do not respond, you will give up your right to statutory exemptions and the judgment creditor may be able to take any or all of your property to satisfy the judgment.”
When you receive this notice, write down the date. As the notice indicates, you have a mere 20 days from when you receive the notice to assert your rights. Too many people do not notice this important instruction or fail to take action in time, so they lose legal rights. Sasser Law Firm assists individuals with completing and filing the Motion to Claim Exempt Property so that your property rights can be protected from a judgment creditor to the extent the law allows. Note, however, that a corporate entity against which a judgment is awarded has no right to claim exemptions under North Carolina law.
How to Fill Out a Motion to Claim Exempt Property in NC
Sasser Law Firm can help you complete the MOTION TO CLAIM EXEMPT PROPERTY, but if you are running close to the deadline, you might choose to complete it yourself. Here are some steps to follow to fill out your MOTION TO CLAIM EXEMPT PROPERTY in NC:
- Read the Notice of Rights to Have Exemptions Designated. This form explains your rights and how you must make your motion.
- Download or print the Motion to Claim Exempt Property. You can print out and handwrite the information or type in your answers and then print the form.
- Copy the information about your case precisely onto the form, including the file number, the date the judgment was filed, name of the county where the case was heard, the judgment creditor’s name, and your name.
- Complete biographical information about yourself, including a description of your residency or citizenship status, marital status, the names of your dependents, and your contact information.
- Write down the address of a home you want to exempt. You can exempt up to $35,000 in your home or $60,000 if you are 65 or older and you previously owned the property with someone else as joint tenants and they are now deceased. You will also need to write down the current amount you owe on the property.
- Write down the location of any burial plots you want to exempt for you or your dependents. This amount goes toward your homestead exemption limit.
- List items of personal property, the price you could sell it for, the amount you still owe on the property, the name of the lienholder, and the debtor’s interest in the property (if any), for up to $5,000 of exemptions. Personal property may include such property as televisions, appliances, furniture, clothing, or other personal property not otherwise indicated on the form. You can also claim another $1,000 in personal property for each dependent, up to an additional $4,000.
- List the information about one vehicle you want to exempt. You can exempt up to $3,500 in the vehicle. That amount is after deducting whatever amount you still owe on the vehicle.
- If you did not claim your full homestead exemption, you can list an additional personal property you want to exempt in number 8, up to $5,000.
- List any wheelchairs, hearing aids, or other health care aids you want to exempt for you or your dependents.
- List any tools of your trade and professional books up to $2,000 for you and your dependents.
- List life insurance policies that name your spouse or dependents as the beneficiary.
- Identify any retirement account you want to exempt.
- Identify funds you have in 529 College Savings Plans that you are permitted to exempt.
- Identify any retirement accounts or benefits you have in other states you want to exempt.
- List any alimony, child support payments, or spousal maintenance owed to you that you want to exempt.
- List any non-exempt property you have in number 17 of the form.
- Sign and date the form.
- Mark how you plan to deliver the form and follow through with this delivery method.
Contact Us for Help
If you are served with these documents and have questions or need assistance feel free to call us to see if we can help you complete the exemption forms and/or to discuss whether a bankruptcy case might help you deal with the underlying debt obligation. A bankruptcy filing may permit a judgment debtor to extinguish the money judgment and possibly extinguish a lien on the property.
This post was originally published in February 2014 and has been updated for accuracy and comprehensiveness in October 2021.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.