Civil suits for unsecured debts in North Carolina can result in judgments against the debtor. Judgments provide options for monetary relief to the creditor after the debtor defaults on paying off the debt. The laws for civil suits vary by state in terms of time limitations for enforcement and exemptions for collection.
Statute of Limitations
Creditors in North Carolina have a three-year window to file a civil suit against debtors who default on unsecured debts. This three-year statute of limitations clock may be restarted if the debtor makes a payment on the account during the three-year window. Creditors can file a civil suit and win a judgment against debtors after the debt is out-of statute, if the debtor neglects to defend against the suit based on the statute of limitations.
Judgments
A civil suit resulting in a judgment in North Carolina is enforceable for 10 years. The creditor also has the option of renewing the judgment for an additional 10 year time-frame, making the total collection period 20 years. As of February 2011, North Carolina judgments carry an 8 percent legal annual interest rate. Interest will accrue on the judgment balance until the judgment is no longer enforceable.
Execution and Supplemental Proceedings
In North Carolina, execution is the first method creditors often use in an attempt to collect the judgment. An execution is a process that utilizes the office of the county sheriff to demand payment from the debtor. The sheriff searches for real and personal property not exempt from the civil suit laws to seize and satisfy the judgment. If no such property is available, the creditor has the option to use supplemental proceedings in an effort to discover hidden assets. By law, the debtor must answer written questions regarding his finances and assets. The creditor may also force the debtor to appear in person before a clerk of court to answer such questions. Failure to appear can result in jail time.
Exemptions
Each state considers specific values of real and personal property exempt from collection based on a civil suit. In North Carolina, as of Feb. 2011, a debtor's primary residence is exempt up to an aggregate interest of $35,000 for persons under 65 years of age and $60,000 for person's aged 65 and older. Other exemptions include $3,500 aggregate value of one motor vehicle, up to $9,000 in household furnishings and up to $2,000 in tools, books and implements necessary for a professional trade.
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