Notice of Right to Have Exemptions Designated - Now What?
A deputy sheriff has come knocking with a Notice of Right to Have Exemptions Designated. What does this mean, and what do you do?
The opportunity to claim exemptions is part of the process of collecting a judgment entered in a North Carolina lawsuit. Before you are at the point of having a Notice of Right to Have Exemptions Designated served upon you, a number of things have already happened. A lawsuit was filed against you, and you would have been served a summons along with a copy of the plaintiff's complaint. Additionally, a judgment has been entered. If you did not file an answer to the complaint, the judgment is likely a default judgment. When a defendant does not respond to a complaint, he or she is determined to be in default. With an entry of default, a plaintiff becomes entitled to a judgment by default providing what was sought in the complaint. If you participated in the lawsuit, judgment might have been entered after the judge granted a summary judgment motion, or after trial. In any event, there has been a lawsuit, and a judgment against you in that lawsuit.
Exemptions represent the right under North Carolina law to keep particular property from creditors, preventing them from using legal process to seize and sell the property. To benefit from exemptions, a person must affirmatively claim them. Failing to claim exemptions can result in a waiver of exemptions. A motion to claim exempt property (official form) must be filed within 20 days of service of the Notice of Right to Have Exemptions Designated. Calculation of 20 days can sometimes be tricky, as counting out the days on the calendar may not result in the correct deadline. If you are uncertain about when the 20 day period concludes, you should err on the side caution, or consult promptly with an attorney.
The motion to claim exempt property form that was served on you contains the North Carolina statutory exemptions. These are not the only exemptions available, as other state and federal exemptions exist to protect particular property, benefits, and earnings. Commonly claimed exemptions include the homestead exemption, the motor vehicle exemption, the household property exemption, and the wild card exemption. Bankruptcy in North Carolina uses the same exemptions, and our bankruptcy website discusses exemptions in detail.
After you file a motion to claim exemptions, the judgment creditor has an opportunity to object to the exemptions claimed. If there are no objections, or the objections are overruled after a hearing, the court will enter an order designating the exemptions (approving your claim of exemptions). While these exemptions will carry forward, one should be aware that the creditor might again try to collect against newly acquired property in the future.
While a motion to claim exemptions is an important option, it is not your only option. A judgment debtor can alternatively request a hearing to claim exemptions in front of the clerk of court. In some situations, it might be sensible to seek to have the judgment set aside and reopen the case. For some individuals, it may make sense to file bankruptcy to seek a more permanent resolution of the judgment or to protect property on which no exemption applies.
Our firm provides a free attorney consultation regarding your options when faced with a Notice of Right to Have Exemptions Designated after a judgment has been entered. We can assist you in selecting your maximum exemptions, and can prepare and file a motion to claim exemptions on your behalf. For many judgment debtors, we can offer affordable flat-rate prices to help you claim your exemptions.