Collections Blog Post 2: Judgment Liens and Post-Judgment Collections

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At the Law Offices of Peter D. Isakoff, we advocate for our clients’ rights to their day in Court, and we fight for trial victories.   But what happens after you’ve won your civil trial, and the Judge has signed and entered an order saying the other side owes you money?  How do you get paid on your Court judgment? 

1.              Collecting on Your Judgment

If you are the Plaintiff and win a civil trial for money owed, then you are called the “Judgment Creditor.”  The person/business owing you money under the Court judgment is called the “Judgment Debtor.”  Ideally, the Judgment Debtor voluntarily pays the Judgment Creditor what’s owed under the Court judgment.  If a Judgment Debtor voluntarily pays the Plaintiff/Judgment Creditor directly, then the Judgment Debtor can require the Judgment Creditor to file a Satisfaction of Judgment with the Court. Alternatively, the Judgment Debtor may pay the Court directly, and then have the Clerk of Court mark the judgment as “paid in full.” N.C. General Statute § 1-239.

In reality, however, voluntary payment often doesn’t happen, and further collection efforts are needed.  Since North Carolina law generally does not allow private Judgment Creditors to garnish wages, the Judgment Creditor must collect and enforce the judgment, if at all, by seizure and public sale of assets of the debtor through the proper legal processes. In other words, enforcement of judgments in North Carolina is “asset-based.”

Under N.C. General Statute § 1-234, the Judgment Creditor has ten (10) years after entry of the judgment to enforce or collect on that judgment. Prior to the expiration of the ten-year period, the Judgment Creditor can renew the judgment for another ten (10) years.  If the judgment cannot be enforced within that period of time, it is no longer enforceable under North Carolina law. 

2.               Judgment Liens

A North Carolina state court final judgment becomes a lien upon the Judgment Debtor’s real estate immediately when the judgment is docketed and recorded in the office of the Clerk of Court. N.C. General Statute § 1-234.  If the judgment was issued by the United States District Court for the District of North Carolina, in any division, that judgment may be transcribed to any North Carolina county court. N.C. General Statute § 1-237. Judgments from a United States District Court outside the State of North Carolina may be registered in the United States District Court for the District of North Carolina pursuant to 28 U.S.C. § 1963.

If the judgment has been issued against the Defendant outside the State of North Carolina, that judgment may be recorded and enforced in the State of North Carolina pursuant to the Uniform Enforcement of Foreign Judgments Act. N.C. General Statute § 1C-1701, et seq.  The filing must include an authenticated copy of the judgment, along with an affidavit stating that the judgment is final and is wholly or partially unsatisfied.  N.C. General Statute § 1C-1703. Under the North Carolina Uniform Enforcement of Foreign Judgments Act, the Judgment Debtor may challenge the enforcement of a foreign judgment in North Carolina within thirty (30) days of being served a notice of recording of the foreign judgment. The Judgment Debtor may raise any of the grounds set forth in post-judgment provisions under North Carolina law. N.C. General Statute § 1C-1705.

A judgment is only a matter of record in the county in which it is recorded. Therefore, for the judgment to constitute a lien on the real property of the Judgment Debtor, it must be recorded in the Court where the property is located. If the judgment is obtained against the individual defendant in one county and that defendant owns real estate in another county, you should record the transcript of judgment in any and all counties in North Carolina where the debtor owns real or personal property. See N.C. General Statute § 1-234.

3.               Self-Help Collection Remedies

There is no general provision in North Carolina law for any “self-help” enforcement of a judgment. We do have a provision in Chapter Nine of the Uniform Commercial Code that a creditor which holds a security interest in property of the debtor or obligor may proceed to enforce that security interest and take possession of the collateral without judicial process, “if it proceeds without breach of the peace.” N.C. General Statute § 25-9-609. Under these statutes on enforcement of security interests, the basic requirement is that “self-help” repossession and disposition of collateral must be in a manner which is “commercially reasonable.” N.C. General Statute § 25-9-610. The secured creditor must give notification before disposition of collateral. The secured creditor using these “self-help” procedures should pay close attention to the requirements of Article 9, Part 6 of North Carolina’s version of the Uniform Commercial Code. There are specific requirements when consumer goods are involved. Application of the proceeds or any resulting deficiency debt is discussed with particularity in these sections of the North Carolina General Statutes.

B.              Conclusion

After a Court win, collecting on your Court judgment can be a complex and arduous process.  But persistence and diligence can pay off in terms of collecting what you’re owed.  If you need legal assistance getting paid what you’re owed, please feel free to contact The Law Offices of Peter Isakoff anytime, day or night, at (336) 863-8348 (Main) or (336) 864-9115 (Español).

DISCLAIMER: The information in this article is provided for informational purposes only. It is not offered as and does not constitute legal advice. The accuracy of the information may change pending changes in applicable law. If you have questions about a specific matter, you should contact a lawyer. The use of this article or any information provided in it does not establish any lawyer/client relationship.