In a civil court case, after a judge or jury hands down a verdict -- or after a court-approved settlement -- a judgment is entered by the court. As part of a typical judgment, the court orders the payment of money from one person to another. But the person who owes the money (the debtor) doesn't always pay up. A judgment lien is one way to ensure that the person who won the judgment (the creditor) gets what he or she is owed. A judgment lien gives the creditor the right to be paid a certain amount of money from proceeds from the sale of the debtor's property.
So how do judgment liens work in North Carolina? Read on to understand the rules. (For more background information on liens on property and judgments in general, check out Nolo's articles Collect Your Court Judgment with a Real Estate Lien and Can You Collect Your Judgment?)
What kind of property is subject to a judgment lien under North Carolina law?
In every state, a judgment lien can be attached to the debtor's real estate -- meaning a house, condo, land, or similar kind of property interest. And some states also allow judgment liens on the debtor's personal property -- things like jewelry, art, antiques, and other valuables.
In North Carolina, a judgment lien can be attached to real estate only (not personal property).
How does a creditor go about getting a judgment lien in North Carolina?
A judgment lien is created automatically on any property owned by the debtor in the North Carolina county where the judgment is entered. For any debtor property found outside the county, the creditor must file the judgment with the county clerk for the county where the property is located.
How long does a judgment lien last in North Carolina?
A judgment lien in North Carolina will remain attached to the debtor's property (even if the property changes hands) for ten years.
Keep in mind: In North Carolina, a creditor's ability to collect under a judgment lien will be affected by a number of factors -- including a fixed amount of value that won't be touchable if the property is the debtor's primary residence (called a homestead exemption), other liens that may be in place, and any foreclosure or bankruptcy proceedings. If things get complicated, you may want to talk with an experienced North Carolina bankruptcy and debt attorney to help you sort out any lien issues.
Where can I look up North Carolina law on judgment liens?
If you want to go right to the source and look up North Carolina laws on judgment liens -- maybe you're a party to a judgment, or you're just researching potential encumbrances on property -- the relevant statute(s) can be found at N.C. Gen. Stat. section 1-234. For tips on looking up North Carolina state laws, check out Nolo's Laws and Legal Research section.