Collections Blog Post 3: Writs of Execution and Sheriff's Levies

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At the Law Offices of Peter D. Isakoff, one collection method we often utilize is filing a Writ of Execution with the Sheriff. With a Writ of Execution, the Sheriff will attempt to locate and seize debtor assets to pay the outstanding judgment. 

1.               Writs of Execution – Sheriff’s Levies on Personal Property

One way to collect on your Court judgment is by filing a Writ of Execution, whereby the sheriff attempts to locate, seize and sell the Defendant’s personal property.  The Writ of Execution process can be used to have the sheriff levy from the Defendant’s bank accounts.

  Under Rule 58 of the North Carolina Rules of Civil Procedure, when a lawsuit ends by jury verdict or final trial Court decision, the Clerk of Court for the county in which the case was pending will promptly enter the “Judgment” on the public record. Once the judgment has been recorded in the appropriate county and has become final, a Writ of Execution may be directed to the Sheriff of that county. See N.C. General Statute § 1-313. The Writ of Execution is issued by the Judgment Creditor and must be issued by the Clerk of Court. The execution order must specify the particulars of the judgment, the identity of the Judgment Debtor, and the money amount of the judgment.

A duly recorded judgment, by itself, does not typically constitute a lien on personal property of the Judgment Debtor.  See M. & J. Finance Corp. v. Hodges, 230 N.C. 580 (1949).  It is only after a Sheriff, upon Writ of Execution, actually seizes or attaches personal property that such property becomes subject to a judgment lien. See id. (“While a judgment constitutes no lien upon the personal estate of the Judgment Debtor, seizure thereof by an officer under authority of an execution creates a special property therein and a lien thereon for the purpose of satisfying the execution. It is the levy under execution that creates the lien in favor of the Judgment Creditor”).  “Attachment” occurs when the Sheriff or his deputy actually takes and seizes property pursuant to the Execution Order. See id.  The Sheriff will actually take possession of the property, insuring and storing the property until it is sold at public auction. The expenses for the seizure, storage, insurance and disposition of the property are paid by the Judgment Creditor. Many Sheriff’s Departments in North Carolina require a prior commitment of the Judgment Creditor to pay the costs of collection.  The procedure and process for conducting a sale of property seized is similar for personal property and real property. A discussion of that procedure follows.

This remedy against the debtor’s personal property is infrequently successful, despite its obvious attractiveness. Firstly, a Judgment Debtor is entitled to numerous exemptions and credits from judgments that protect personal belongings. Secondly, Sheriffs can also view collection of personal assets to satisfy civil judgments to be a low priority.

2.                Writs of Execution - Sheriff’s Levies on Real Property

Judgment Creditors can also use Writs of Execution to direct the sheriff to levy on the Defendant’s real estate.

One Writ of Execution, issued by the Clerk of Court, is sufficient to direct the Sheriff to seize both personal and real property of the Judgment Debtor. See N.C. General Statute § 1-313.  If the Judgment Debtor is able to satisfy the debt prior to the sheriff’s sale of the seized property, then the sheriff’s right to sell the seized property terminates.  N.C. General Statute § 1-339.57.  If the Judgment Debtor is unable to satisfy the judgment or debt, the Sheriff is directed to sell the property “by auction.” Before the Sheriff conducts the judicial sale, North Carolina General Statutes requires public advertisement of the proposed judicial sale. In the case of the sale of real estate, the sale must be advertised for at least 20 days immediately preceding the sale, and published once a week for at least two successive weeks in a qualified newspaper.  N.C. General Statute § 1-339.52.  For personal property, the notice of sale need only be posted in the appropriate place in the county courthouse for 10 days immediately preceding the date of sale.  N.C. General Statute § 1-339.53.  The advertisement must specify the execution authorizing the sale, the date, hour, and place of the sale, describe the property, and state that the sale will be made to the highest bidder for cash. N.C. General Statute § 1-339.51.  Usually, the staff at a Sheriff’s Office has a form used for advertising judicial sales. The cost of that advertisement will be included along with the Sheriff’s fees which must be paid by the Judgment Creditor. Real estate sales are conducted at the courthouse of the county.  N.C. General Statute § 1-339.44.  The sale of personal property may be at a time and place convenient for the Sheriff as long as advertised according to law.  Id.

In execution and foreclosure sales of real estate, the auction bidding remains open for a period of ten (10) days after the day of public sale. See N.C. General Statute § 1-339.64. Any third party, except the highest bidder at sale, may come in within that ten (10) day upset bid period and submit a higher bid. In the meanwhile, the highest bidder from the auction sale deposits some guaranty with the Sheriff’s Office. The guaranty deposit is usually five (5%) percent of the price bid.  Id.   Any new bid during the 10-day upset bid period re-starts the 10-day “clock.”

Sales by the Sheriff are for cash. If the high bidder fails to consummate the sale by paying the balance due at the end of the upset bid period, the Sheriff may re-sell the property at the “risk” of the defaulting high bidder. If the subsequent resale of the property brings a lower price, the defaulting high bidder is liable to the Sheriff for the difference in the purchase prices. N.C. General Statute § 1-339.69. The Judgment Creditor may bid any amount up to the total amount of the judgment. This procedure is sometimes called a “credit bid.” In any event, the Judgment Creditor must pay the Sheriff’s Office for the expenses and fees incurred in the judicial sale.  If there are no competing bids at the auction, the Judgment Creditor may submit a low, nominal bid in order to keep the Sheriff’s costs to minimum. However, such a “low bid” by the Judgment Creditor runs the risk of an upset bid as discussed above.

A judgment lien, or any other lien or encumbrances, only has priority over subsequent liens, creditors and purchasers from the day and hour when the lien is recorded in the Office of the Register of Deeds or Clerk of Court in the county in which the real property is situated. See N.C. General Statute § 1-313.  When the Sheriff pays over the proceeds of a judicial sale, the prior liens are fully satisfied before subsequent or subordinate lien holders receive any funds. See N.C. General Statute § 1-339.68.

As mentioned above, most of the Sheriffs in North Carolina are preoccupied with law enforcement activities, management of the county jail, and other anti-crime efforts.  In many cases, the Sheriff’s deputies will only do minimal investigation regarding real or personal assets of the Judgment Debtor. It is up to the Judgment Creditor to point the Sheriff’s Office in the direction of assets sought. If the terms of the execution order are clear, ownership of the asset is undisputed, and there is no question of other liens or exemptions, the Sheriff will ultimately auction the property and turn the funds over to the creditors. Such result, however, is not immediate or automatic. Since there is no garnishment of wages in North Carolina, see N.C. General Statute § 1-362, the Judgment Creditor must use a mixture of persistence and diplomacy in order to execute a judgment in the State of North Carolina. If a Judgment Debtor has any money at all, the prospect of a public auction of assets will usually invoke offers of settlement. The Judgment Creditor who persists in post-Judgment execution activities is the creditor most likely to recover something.

3.                Conclusion

Filing a Writ of Execution and utilizing the sheriff to attempt collection through sheriff's levy can be a useful way to get paid for your judgment.  As always, 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.