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After a plaintiff wins a lawsuit, he or she can ask the sheriff to seize personal property to satisfy the judgment if the defendant fails to pay.

The Motion to Claim Exempt Property protects the defendant's property from seizure.

Before your property is taken for a debt, you must receive a Notice of Right to Have Exemptions Designated and a Motion to Claim Exempt Property. You must fill out the Motion to Claim Exempt Property, return it to the clerk of court, and send a copy to the plaintiff or plaintiff's attorney within 20 days.

If you do not fill out the form or do not claim property as exempt, the plaintiff can then ask the sheriff to start the execution. The sheriff can then come to your home or place of work to collect the money or seize property to sell in order to pay the judgment.

The sheriff can check at your house from time to time to see if you have gotten any property that is not exempt or given away any that you claimed. For more information on exempt property, contact your local Legal Services office.

The sheriff will not put you in jail because you cannot pay the judgment. The judgment stays on your record for at least 10 years or until you pay it.

What Property Can Be Protected:

The exemption law lists different types of property, and sets limits for the amount of each type of property that can be exempt. Exemption limits are based on the "equity value" of your interest in each item of property. To determine your equity value in an item, follow these steps:

   1. Determine the fair market value of your interest in the item. "Fair market value" means what you could sell the Item for (at the flea market, for example). If you co-own the item with someone else, only the fair market value of your share of the property is counted.
   2. Determine the amount owed (pay-off) to each creditor who has a security interest in the item.
   3. Subtract # 2 from # 1.

Following is a list of the types of property that can be exempted, with the "equity value" exemption limits for each type of property.

Each debtor can exempt:

    * up to $18,500 in land, house, mobile home or other property used as a residence, or burial plots. (Additional protections may apply to real property or mobile homes owned by married persons.)
    * up to $5,000 in any property (this amount is reduced by the amount of exemption claimed for residence or burial plot).
    * up to $3,500 in one automobile.
    * up to $5,000 in clothes, household furnishings and goods, appliances, books, animals, crops, and musical instruments which are used primarily for personal, family, or household use. (This amount increases $1,000 for each dependent of the debtor up to a maximum of four (4) dependents.)
    * up to $2,000 in books, tools, or other implements used in the trade of a debtor or dependent of the debtor.
    * life insurance policies listing dependents as beneficiaries.
    * items of health care aid necessary for you or your dependents to work or sustain health.
    * compensation for personal injury or for the death of a person upon whom you depend for support (unless the judgment is for services related to the compensated injury).

What Property Is Not Protected?

Exemptions don't apply to the following:

    * all of your property, if you fail to claim your exemptions on time!
    * the value of property in excess of the exemption amounts allowed.
    * personal property purchased less than 90 days before the judgment collection proceedings begin.
    * claims of the Federal government or its agencies, to the extent that federal law so provides.
    * claims of the State or its subdivisions for taxes, appearance bonds, or fiduciary bonds.
    * claims for liens placed by law against specific property.
    * if a creditor takes a security interest in connection with the purchase of an item, the item is not exempt from a judgment for the property by that creditor.
    * orders for child support, alimony, or property distribution related to divorce or alimony.
    * property owned by debtors who do not reside in North Carolina.
    * judgments against corporations.

Tips For Protecting Your Exemption Rights

   1. Notify the Clerk of Court and judgment creditor(s) if you change addresses after a judgment is entered. If you cannot be located for personal service by the Sheriff or by certified mail, service of the exemption notice can be made by regular mail to your "last known" address, whether or not you actually receive it.
   2. Carefully read all mail and Court notices you receive. Your 20-day time limit for claiming exemptions begins on the day after you are served with the exemption notice.
   3. Read and follow the instructions stated on the Motion form. Complete each section of the Motion. Make sure you list all of your property, including your share of property owned with others. You can attach additional pages if necessary. Values should be based on what you reasonably believe you could sell the item for at a flea market, for example. If an item has no equity value (see above), you should list the item with a "$0" value.
   4. Make sure to follow instructions at the end of the Motion for signing, dating, and serving your Motion. One copy of the Motion must be filed with the Court, and a copy must also be sent to the creditor - all within the 20 day time limit.
   5. If you need help completing the exemption motion, if you own property in excess of exemption limits, or if the creditor objects to your exemptions, promptly contact an attorney or legal services program for assistance.

The form for the Motion can be found here:

http://www.nccourts.org/forms/Documents/927.pdf

If I have answered your question, please click Accept. I am happy to answer follow-up questions if you need clarification.

Thanks,
Christy

     

Expert:	Christy
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Answered:	10/27/2008

Attorney

Former General Counsel for nationwide corporation. Contracts, rental properties, business law.