Our home has been in the family for three generations. We do not owe money on it. It is not in great shape but it's not falling apart, either. I don't know how much equity we have because we haven't done much in the way of home improvements.
I am being hounded by collection agencies due to outstanding medical bills I cannot afford to pay off.
Can my house be foreclosed on? (I'm sorry I don't know the technical terms to ask this question real well).
In North Carolina, a creditor CAN have the county sheriff seize and sell a debtor's property to satisfy a debt... BUT, the creditor must first file a lawsuit against the debtor and win it.
The party who wins a lawsuit can then collect (or “execute”) on the judgment awarded. He or she can ask a county sheriff to seize the losing party’s property and sell it or to levy on the losing party’s bank account. North Carolina law, however, allows each losing party (known as a “judgment debtor”) to keep a certain amount of money and property safe from judgment collection.
North Carolina’s safe amounts, known as “exempt property” or “exemptions” include the following:
1. $35,000 in equity in a residence;
2. To the extent that you do not use the $35,000 residence exemption, then up to $5,000 in equity in any property of whatever type, INCLUDING money in a bank account;
3. $3,500 in equity in any one vehicle;
4. $5,000 in equity in household goods, plus $1,000 household goods for each dependent, up to a maximum additional amount of $4,000;
5. $2,000 in equity in tools or equipment that are used in a business or trade;
6. Health-related items, such as hospital beds, scooters, and the like;
7. Certain investment property, including certain life insurance policies, certain retirement plans, and certain college savings plans;
8. Money that comes from personal injury settlements, alimony, child support, TANF/Workfirst, workers’ compensation benefits, and sixty (60) days worth of your wages or earnings used to support the family.
In addition, federal law protects money that comes from Social Security, SSI, and Veterans’ Benefits.
When only one spouse is a judgment debtor, but both are owners of the residence, the residence may be entirely exempt. The judgment debtor should have an attorney review the deed to the residence to provide an opinion on whether the residence owned by a judgment debt or and his or her spouse is entirely exempt.
When only one spouse is a judgment debtor, but both are co-owners of personal property, such as a vehicle, the judgment creditor may only execute on the non-exempt equity that the judgment debtor holds in the personal property.
For more information, review the exempt property laws at http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_1C/Article_16.html .
If a judgment debtor is unable to pay the judgment, and has non-exempt property that is at risk of being executed on to satisfy the judgment, he or she may wish to consult a bankruptcy attorney to learn about other options for dealing with the judgment.
(This response does not constitute legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. The questioner should confer with an attorney about the specifics of their case.)
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