Collection & Execution Information

If the party against whom you have obtained a small claim's judgment fails to pay the judgment voluntarily you may seek to collect on the judgment through a process called execution. You must wait for the 10-day appeal time period to expire before you can commence execution.

• Judgments

Appeal

A Small Claims judgment can be appealed in one of two ways. First, the individual against whom the judgment has been entered can give notice in open court of his or her intention to appeal the judgment. The Magistrate will make a notation of the appeal on the judgment, however, the appeal will not be perfected unless the appeal costs which are presently $70.00 are paid to the Clerk of Court. Appeal costs must be paid within 20 days of the trial date. The alternate method of taking an appeal is by giving written notice of the appeal within 10 days of the court hearing and then paying the appeal costs to the Clerk of Court within 20 days of the court hearing.

• Small Claims

If the appeal is perfected, the case will be scheduled trial by the Trial Court Administrator for a trial de novo, which means a totally new trial. The case will be retried in its entirety before a District Court Judge. If the amount in controversy is for less than $15,000.00, then in Wake County, the case will be heard for mandatory Arbitration. The case is then set for a specific date and time before a single Arbitrator who is a local attorney with at least five years of legal experience and who has also been trained as an arbitrator. Either party had 30 days to appeal the Arbitrator's decision which is either made that day or within three days of the hearing. The cost to file an appeal is currently $75.

Demand Letter

After you have obtained a judgment and the appeal time has lapsed, you may want to send a demand letter, along with a copy of the judgment to the judgment debtor requesting payment. If the judgment debtor does not pay the judgment voluntarily or no agreement can be reached on an acceptable payment plan, then you will need to commence the execution process.

Notice of Rights and Motion to Claim Exempt Property

If the judgment debtor is an individual, you must serve him or her with a Notice of Rights to Have Exemptions Designated, and a Motion to Claim Exempt Property before commencing to execute on the judgment. However, if the judgment debtor is a corporation this will not be necessary. The Notice and Motion should be served on the judgment debtor by certified mail, return receipt requested, or by the Sheriff's Department.

If service cannot be obtained by either of these methods, then you may mail a copy to the judgment debtor at his or her last known address. If the papers are served on the judgment debtor by certified mail, or if they are simply mailed to the judgment debtor after you have attempted and failed to obtain service by certified mail or the Sheriff's Department, then you will need to submit an affidavit of service to the Clerk of Court. An affidavit is a sworn written statement signed in front of a Notary Public. You will need to attach the post office receipts.

After a judgment debtor has been served with the Notice of Rights and Motion to Claim Exempt Property, he/she has 20 days to complete the Motion and file it with the Clerk's Office. If these forms were served by mail, then they have three additional days to complete and file the paperwork.

A copy of the completed and filed paperwork is supposed to be sent to the judgment creditor by the debtor, but rarely is. A judgment debtor will attempt to protect his property from execution by claiming as many exemptions that are allowed under law. A listing of the types and dollar amounts of property which may be exempt from execution is set forth in North Carolina General Statutes 1C-1601(a).

• 1C-1601. What property exempt; waiver; exceptions
  03-03-2005
• 1C-1602. Alternative exemptions
  03-03-2005

If the judgment debtor does complete the Motion to Claim Exempt Property, the judgment creditor has 10 days after it is served upon him to file a motion objecting to the exemptions and requesting a supplemental hearing. This hearing is to determine allowable exemptions and will be heard before a District Court Judge or the Clerk of Court.

• 1C-1603. Procedure for setting aside exempt property
  03-03-2005

If the judgment debtor does not complete the Motion to Claim Exempt Property, this will constitute a waiver of his or her rights. Then all of the judgment debtor's individually owned property will be subject to Execution. You may apply to the Clerk of Court for an Execution order. The Execution fee is presently $22.50. The Sheriff's Department will also charge $5.00 to serve the Execution. The Sheriff's Department has 90 days after the issuance of the Execution order to levy on the defendant's property to satisfy the judgment.

The Sheriff's Department will first attempt to locate personal property of the defendant. If none can be located or if it is insufficient to satisfy the judgment, then the Sheriff's Department will levy on real estate owned by the defendant. If the Sheriff's Department is able to locate property which they can seize and sell at a Sheriff's Sale, you will likely be requested to advance the costs necessary to seize and sell the property.

• Judicial Forms
• 1C-1604. Effect of exemption
  03-03-2005

Transcribing a Judgment

If you think that the judgment debtor owns or is likely to acquire real estate in other counties within this state, it is a good idea to have the Clerk of Court in the county where the judgment was entered issue a transcript of that judgment to the other county or counties. It will cost you $7.50 for each transcription and the forms are available in this office or at the Clerk of Court's Office. This is an important step to take because a judgment acts as a lien against the real property of the judgment debtor in each county where the judgment is docketed. If the debtor is out of state, you will need to contact the clerk of court's office in that state to determine the process and costs to transcribe the judgment there.

• Court Costs (pdf)

Supplementary Proceedings

If an execution is returned wholly or partially unsatisfied, you may, within three years from the issuance of the execution, request an order from the court directing the debtor to appear before a District Court Judge or the Clerk of Court to answer questions concerning his or her property. In the alternative, you may serve the judgment debtor with interrogatories concerning his or her property. Interrogatories are written questions requiring the debtor to answer under oath. These interrogatories must be served in accordance with the Rules of Civil Procedure. If the judgment debtor fails to respond to these interrogatories, you may seek an order from the court requiring the debtor to answer.

Payments on Judgments

You must notify the Clerk of Court regarding all payments received on a judgment within 60 days of receipt of monies. If you go in person, please bring a picture ID. If you are mailing notification, you must do so by an affidavit. Once the full judgment is satisfied, the Clerk will indicate on the judgment docket that it has been paid in full and cancel it.

This is general information about Execution and Collection and is not intended to be a substitute for legal advice as it relates to your particular situation. Consult with our office to discuss how your particular facts relate to the law