Post Judgment Collections in North Carolina

Melissa Tulis Smith: 0:00

You. Hello, and welcome to the podcast series, Creditors Corner Legal Talk, presented by Smith Debnam Attorneys at Law where we explore a range of legal topics impacting businesses and private individuals. So be sure to hit subscribe so you never miss an episode. My name is Melissa Tulis Smith, and I’m an attorney in the firm’s consumer collections section. I will be your moderator today. Today’s topic is post judgment collections. Before we begin, I want to note the information provided in this podcast does not and is not intended to constitute legal advice. Instead, any and all information shared is for general informational purposes only. Listeners should contact their attorney to obtain advice with respect to any particular legal matter.With that out of the way, let’s now turn our attention to this week’s topic. With us today is Christina McAlpin Taylor. Christina is also an attorney in the firm’s consumer collections section.So without further ado, let’s go ahead and get to our questions today. First off, Christina, with post-judgment collections, how do you generally make the determination on what property your client can execute on?

Christina McAlpin Taylor: 1:28

Melissa that’s a good question. And real quick, I just want to give everybody a practical tip. One of the important things to make sure of before you move forward with execution is to determine that you do have an appropriate execution excuse me, an appropriate judgment in the county where you’re moving forward with execution. So it’s important to make sure that you’ve got that judgment and that it is reflected properly before you move forward with execution. So that’s just a quick practical tip. Determining what property we should execute on sounds like that would be something fun and exciting, for better or for worse. With the clients that we represent, we often have to rely on what the clients will allow us to do. We have a lot of different clients that are either credit card clients or auto finance clients and lots of different credit type clients. And each of them have a little bit different mindset on what they’re comfortable with us levying on. So our clients tend to set the practice and tend to help us determine what, in fact, we’ll be able to execute on related to property. Some of our clients will allow us to levy, and other clients will let us look at real property. I really haven’t found a client yet that’s actually going to let us move forward with the foreclosure of real property, but it’s good to know that to help to negotiate settlements with the defendant. So we keep that in mind. Some clients will allow us to execute on the personal property. Obviously, if there’s like a bass boat or a four wheeler or something of that nature, most clients are comfortable with us levying and executing on that particular property. So those are some of the factors that we’ll consider. Of course, we’ll take into consideration if we’ve spoken to the defendant and they explain to us some type of hardship or a situation that they’re in, that they really need that vehicle, maybe for health reasons or doctors appointments or for their job. We’ll take that into consideration and we’ll let our clients know about that before we make a decision. There really is more of a case by case basis,and a lot of the factors have to do with which client it is that we’re doing the execution for.

Melissa Tulis Smith: 3:24

So if you have a case where you determine there is some property that you are legally able to execute on and or believe you are, and that your client will allow you to execute on, what would be the next step?

Christina McAlpin Taylor: 3:37

That’s another good question.And again, a practical tip here that I’ll say probably a few times during this podcast, is to make sure that you have a really good relationship with those deputies who are working these executions.It is so important that you have a good working relationship with them that you don’t step on their toes, that you let them do their job.So I’ll remind everybody in here, once you get to the execution process and the deputy is serving that rid of execution, you really need to tell your staff and yourself to remember to keep your hands off, don’t settle the accounts behind the back of the deputy or anything of that nature.I know nobody would do that on purpose.But it’s important that you remind your staff,hey, this is an execution.You have your files coded appropriately so people know that, so they don’t accidentally work out a payment plan.Because as most of you know who are listening today, the deputies make a commission off of these executions, and it’s important that you keep that relationship going and treat them with the respect that they deserve.That’s my practical tip.Back to your question about the next steps related to the property.Again, because we have such a good relationship with the deputy, they’ll often call us and they will let us know that they’ve located this property.They’ll provide us with information about the condition of the property.They might call us and say, for example, I keep talking about the bass boat because that’s an easy one.Hey, Ms. Taylor, we found this bass boat out here.It’s in great condition.I think it’s worth a lot.I myself would like it joking around with us,and then we know that might be something worth executing on.On the other end, we might get a phone call from a deputy who says, hey, it does say that they own a bass boat.We learned about this, but we went out there.There’s no engine on it.It’s rusted through.There’s no way it’s going to work.It’s probably not even worth $100, not worth your time.So again, we rely greatly on those deputies to really inform us and the sheriffs to let us know.My staff mentioned that some sheriffs will go as far as calling us with the DMV report and letting us know before we move forward with anything.And that’s good and that’s important.That can be helpful as well.But really, like I said, it’s just that personal relationship with the deputy that we rely on to know about the property.

Melissa Tulis Smith: 5:30

So as we all know in North Carolina, debtors have an opportunity to claim exemptions.What are some common objections that a creditor can make or that you see a creditor make to those exemptions?

Christina McAlpin Taylor: 5:46

Yeah, again, we’re a little bit different than maybe some other cases because with some of our bigger creditor clients, they really as a general rule, we don’t object to these, although we legally could.But some good objections might be if somebody had multiple vehicles listed or if they have recreational items.Again, the bass boat or the four wheeler or a jet ski.Those are probably the most common things that we would want to object to related to the motion to claim exempt property.

Melissa Tulis Smith: 6:10

Regarding that catch all exemption that debtors can use in North Carolina, have you had any experience with debtors claiming this exemption in any sort of unusual or creative way?

Christina McAlpin Taylor: 6:22

Yeah, I don’t know about creative, but we’ve definitely had some funny instances where they might just put in their money, cash.That’s what they want to be their catch all.And that’s not very helpful to us, nor is it helpful to them.That’s just a funny aside that they do.Otherwise we might see things like bank accounts which they’re not divulging the bank name.So again, that’s not really how the catch all should be used.Those are the two most common things.

Melissa Tulis Smith: 6:46

That I’ve seen that makes sense.I’m going to move on now to levying on a bank account of the debtor.How do you move forward with levying on a bank account?

Christina McAlpin Taylor: 6:59

Levying on bank accounts in North Carolina has changed a lot since I’ve been practicing law.There’s been lots of different things that have happened, practically speaking, related to that, and truly that is different and it varies greatly from county to county.So it really depends on what county you are actually trying to do the bank levy on.I think that really would be another podcast where we’d have to go through just county by county.We do have a list of the counties and how those work.If anybody has questions, they can reach back out to us, but that’s really just handled differently.We have some deputies in some counties who will do a blanket bank levy and they’ll see what they can find out.We have others that want to know the exact bank account before we move forward.Practical tips related to that would be looking at credit reports are often helpful to see where the people bank or if you knew that somebody worked for like the state, for example, they might have an account with state.Employees Credit Union.And that would be a good opportunity to hit a bank levy with the State Employees Credit Union, because most people who work for the state have an account with State Employees Credit Union, for example.So that just really varies depending on the particular county.

Melissa Tulis Smith: 8:03

Yes. So you said that the bank levy procedure differs from county to county.Are there any counties that require a formal order and aid of execution to do a bank levy?

Christina McAlpin Taylor: 8:15

I believe there are.I think there are several that require that.Maybe I don’t know if I would say more than most, but I think there’s quite a few that do require that.So, again, my suggestion for the practical tip would be to speak with local council in that particular county, or you can, of course,reach back out to us and we can help you with the list of that.There are some counties that do request order related to that.

Melissa Tulis Smith: 8:36

And what if the bank refuses to comply with an outstanding writ of execution?Are there any ways to compel the banks to comply?

Christina McAlpin Taylor: 8:45

Yes, I think there are ways that we can get the banks to comply.And most banks don’t give you I mean, I take that back.Most banks don’t want to do the bank levy because if you think about it, the bank levy is against their customer, especially in some of those rural towns.They’re resisting that because they might know, for example, it might be their neighbor who they helped open this account with, and they have a close relationship with them, and they might feel like it’s unfair not understanding all the laws and the regulations related to it.But most of the banks, once they see that or hear about it do comply, they’ll freeze that account and hopefully not before they let the consumer know about that.So most of the time we can get that to work out okay if they don’t comply with that.I think it was your question.I’m not honestly sure what the next best step would be.I guess it would depend on the bank that you’re dealing with to figure that out.And again, this goes back to just the press practical tips of working with the deputies.If you’re kind with the bank and you talk to the bank and with those representatives and explain to them the procedure, they usually,I’d say nine out of ten times do what we even more than that.Nine and a half out of ten times they do what’s required of them.So that usually works okay for us.In the counties that allow that with the deputies who work that properly.

Melissa Tulis Smith: 9:56

As we both know, a lot of debtors will have a credit card or a debt just in their name, but they may be married and share, say, a checking account with a spouse who is not a debtor.Are there any considerations to keep in mind when executing on a joint bank account where one of the account holders is not a judgment debtor?

Christina McAlpin Taylor: 10:17

Yeah, that is a good question, and that comes up quite often.As you said.For example, we might have a judgment against just the husband and not the wife, and they have a joint account.So if we don’t know if the defendant shares the bank account with a non judgment debtor,we need to be careful.If the defendant is the primary account holder of the account and the account is put on hold,they’ll be held for the bank for approximately seven to 15 days before they’re turned over.If the non judgment debtor reaches out to our firm to tell us that, hey, you’ve frozen this account, part of the money in that account is actually my money.It’s not my wife’s money, we might ask for some type of proof related to that.If they can show us the bank statements to show that the deposit was made from the place that they work or different things of that nature, we’re pretty cautious about that, and we want to be careful because obviously we really only want to get the money of the person that we’ve got the judgment against.So that is a good question, and that’s something that people should certainly be careful about.

Melissa Tulis Smith: 11:17

That makes sense.How successful would you say post judgment collections are in general?

Christina McAlpin Taylor: 11:23

North Carolina is such a unique state because we don’t have the opportunity to do garnishments, so this is something that we rely on heavily, and I’d say that it is pretty successful.But again, I think our success comes because we do have such good relationships with those deputies.Deputies.I would guess if you were to ask them, most of the time, they would say this is maybe their least favorite part of their job, or it feels more like an administrative task.So if you don’t have a good relationship with them, they’re going to put it down at the bottom of their pile.If you have a good relationship with them.John Stanton, who works in our group, has a great relationship with all them.He sends them birthday cards, speaks with them daily, weekly, knows a lot about their family.They want to help us to get these execution satisfied, and they want to make the commission on their account.So I’d say, although maybe we don’t have great success with bank levies or levying on particular personal property, just having the sheriff go out there and serve the rid of execution or the notice of rights often gives us a call from the consumer or the defendant saying, hey, I realized I own this account.I’d forgotten about it.I’ve been reminded now, what can I do to satisfy this account?And it helps us to settle these cases and to work out a resolution for both the defendant and for our clients on the plaintiff’s side.So I think that they’re very successful.I think they’re important part of the collections.You can send letters all you want and try to work out settlement campaigns, but having this extra tool to actually move forward post judgment executions is a really important tool, and often, like I said, relies on your relationship with the sheriffs and deputies.

Melissa Tulis Smith: 12:53

Very helpful advice.Do you have any other tips of the trade or words of wisdom on post judgment collection efforts?

Christina McAlpin Taylor: 13:02

No, I’ll just wrap it up again by saying what I just said, which is my biggest and most important practical tip of this is making sure you have a good relationship with those deputies that you’re working with on and paying attention to the particular county that you’re trying to do the execution on.That varies.Like I said, we have 100 counties in North Carolina, and I’d venture to say that each county handles it just a little bit differently.So having somebody in your office who’s the expert on executions or can keep up with the different deputies or the different things that are required from county to county would be most important.

Melissa Tulis Smith: 13:32

Well, thank you,Christina, and I want to thank you for participating in my questioning today.And I want to thank the audience for listening and also invite our listeners who may have further questions, to email or contact Christina or I via our email addresses.Mine is Mtulus@smithdevnamlaw.com.And Christina, if you don’t mind giving your email.

Christina McAlpin Taylor: 13:57

Sure, absolutely.Thank you, Melissa.And again, like Melissa said, feel free to reach out to us.You can look on our website where you can find our direct phone number or email addresses,but my email is still my maiden name, so that’s Cmcalpin@smithdebnumlaw.com, which is a lot.It’s probably easier to go ahead and look on our website, so we invite you to check that out and of course, feel free to reach out if you have further questions.

Melissa Tulis Smith: 14:19

Thank you very much, and we’d like to let our listeners know to check out.The other episodes also can be found on our website.And remember to subscribe to this podcast.Thank you everyone, and stay well.