The party who wins a lawsuit can collect (or “execute") on the judgment awarded. "Execution" means that the winning party can ask a county sheriff to seize the losing party’s property or 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:
When only one spouse is a judgment debtor, but both are owners of the residence, the residence may be entirely exempt. When the judgment debtor co-owns property with someone else, the judgment creditor may only execute on the non-exempt equity in the property. The judgment debtor or the co-owner should have an attorney review the lawsuit complaint and deeds or titles to any co-owned property to provide an opinion on whether it is exempt, and to what extent.
Important: you must assert your right to claim exempt property in order to keep it safe. Before it executes on the judgment, the winning party must send forms to the judgment debtor, entitled Notice of Right to Have Exemptions Designated and Motion to Claim Exempt Property. The judgment debtor should READ THE INSTRUCTIONS on the paperwork and follow them carefully.