What is the Difference Between Surrendering a Home and Foreclosure? Property owned as tenants by the entirety is exempt without any equity limit with respect to the debts of one spouse (ex. Federal law protects assets in qualified retirement plans (pension and profit sharing plans) but not assets in an IRA, including rollover IRA's. North Carolina law specifies what assets are safe from sale — before debts are discharged. In some cases the creditor will ultimately sue in South Carolina state court to obtain a civil judgment. You use it or plan to use it as your “primary” residence – where you live most of the time. In general, a will sets out your choices about who receives your property, or at least a specific type of your property known as probate property. (N.C. Gen. Stat. (e) Bond [Bond, AOC-E-401] Generally, an executor of a will who is a North Carolina resident is not required to furnish a bond before being authorized to … When Do I Need Exemptions / Why Should I Worry about This? Image source: NCCourts.org. What Should you do? Statutes are different from state to state. If you live in state X, whose homestead exemption allows for $50,000 in equity to be protected from creditors and your home is worth $300,000 with a $280,000 mortgage balance, creditors cannot take your home. For example, if you owe $25,000 to a credit card lender who has sued and obtained a judgment against you, that company cannot force the sale of your home as long as all of your home equity is exempt under your state’s exemption limit. Exempt work tools and medical aids from a North Carolina judgment. N.C. General Statute section 1C-1601 covers what assets creditors can seize and sell to satisfy judgments – a topic which is entirely separate from filing bankruptcy, by the way. Importantly, exemptions do not necessarily protect the value of that property, but rather, the amount of equity you have in the property. No, but the State can file a lien on that property, which must be satisfied before it is sold. Home. North Carolina marital property laws do not recognize community property, which gives the parties more options for how marital property is divided in a divorce. First, they will do what any creditor would do- call and harass to get you to pay. When they get liens it means they can start trying to foreclose on houses, take money out your bank accounts, repossess vehicles, etc. In fact, most judgment-proof people share common characteristics. (see North Carolina bankruptcy exemptions) Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13. At that point, the lien holder can … In the event that you have been served with a Notice of Right to Claim Exemptions, you typically have 20 days to respond before waiving your right to claim exemptions. Equity Stripping. The legal term “exemption,” in the creditor-debtor setting, is a fancy term for “protection.” North Carolina General Statute § 1C-1601 protects property from the claims of creditors up to a certain value. Though one of your creditors can open your probate estate, the court might not permit the creditor to act as the representative of your estate. Confused? Ultimately, the probate court will pass final approval. [G.S. How Exemption Laws Work Inside and Outside of Bankruptcy. In Chapter 7 bankruptcy, the court can sell off some of your property to pay your creditors. With a judgment in hand, a creditor can attach a lien to the property of a debtor, including any homes. Get a Quote. Co-signors of a loan can be stuck with your debt unless they also file for bankruptcy protection. Determine if an estate plan exists. For example, if you owe $25,000 to a credit card lender who has sued and obtained a judgment against you, that company cannot force the sale of your home as long as all of your home equity is exempt under your state’s exemption limit. ... Can they take your house in North Carolina for not paying credit cards? General Information About the North Carolina Bankruptcy Exemptions. North Carolina exemption law only protects up to $35,000.00 per person in home equity for the NC homestead exemption, and the other exemptions are … The homestead law only protects your home if: You live in the house or plan to live in the house. You can file a Chapter 7 bankruptcy once every six years. North Carolina has stringent restrictions on wage garnishment, about which you can learn here. In North Carolina, probate is the process that happens after a person (the"decedent") dies, regardless of whether the person died with a valid will or without a valid will. This process can take from 6 months to a year and can cost your survivors from 3 to 5 percent of the assets. Unmarried debtors age 65 or older may exempt a value up to $60,000. This is why we typically discourage our debtors from withdrawing or taking loans against 401(k) accounts, absent extenuating circumstances. NC does not allow garnishment of wages in a simple contract money owed case. If you are (1) sixty-five or older, (2) hold the property as a joint tenant or tenant by the entirety, and (3) the surviving spouse has passed, then this exemption is increased to $60,000 in equity. Consumer: Protect Your Property if a Judgment is Entered against You Authored By: Legal Aid of North Carolina. It depends upon the state laws as to whether your creditor can take away your home or car. 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