September 23, 2017

How Long Will Creditors Try to Collect on a Judgment?

In my ongoing series of blog posts about debt collection, garnishments, judgments, and how to rebound from financial setbacks I am asked lots of questions. One reader asked what happens when you've proven to the sheriff that all your property is exempt from the judgment. She said, "Do they hawk you for years waiting for your financial situation to improve? What happens if you win the lottery … [Read more...]

Chapter 11 or 13 for Troubled Businesses ?

This month news of an oil and gas producer filing for Chapter 11 bankruptcy protection made news. The reason cited for the financial difficulty is the drop in oil prices, which have have slid some 50 percent since June. My Chapter 11 clients own small to mid-sized businesses, but they have the same problems as bigger companies who need to reorganize under the orderly process of a bankruptcy … [Read more...]

Wage Garnishment in North Carolina: on the way?

In many states, judgment creditors can satisfy judgments by requiring the debtor’s employer to withhold a portion of the debtor’s wages to be applied to the judgment. This has not been the case in North Carolina because North Carolina General Statute §1-362 provided that earnings within 60 days prior to a garnishment order could not be reached by the creditor. This effectively prevented wage … [Read more...]

What Can I Do about a Judgment against Me in NC?

A creditor has obtained a judgment against you. That means that the judgment constitutes a lien on your real estate (land and buildings) in the North Carolina county in which the judgment was obtained and in any North Carolina county into which it has been transcribed. It also means that the judgment creditor can have the sheriff seize personal property—anything other than land or buildings, … [Read more...]

Chapter 11 Bankruptcy Primer, Part 2 of 2

While Chapter 11 bankruptcy is not as frequently employed as Chapters 7 and 13 it is appropriate in some circumstances. This post, along with the first part in the series, will answer many frequently-asked questions about Chapter 11. I also recommend downloading my guide to Chapter 11 here. Q: What questions do I ask a prospective Chapter 11 client to determine whether they should “collapse … [Read more...]

Chapter 11 Bankruptcy Primer, Part 1 of 2

Chapter 11 bankruptcy cases by large corporations make the news more frequently than smaller companies using Chapter 11, leaving some business owners and nonprofit organizations like churches wondering whether Chapter 11 is an option for them. Chapter 11 is not as straightforward to explain as Chapter 7 or Chapter 13, so I wrote this white paper on Chapter 11 and designed this FAQ: Q: How … [Read more...]

Creditors and Divorce Agreements

Most married couples incur joint debts during their marriage, meaning that both spouses are liable for the debt.  Here are some general thoughts to consider if you find yourself contemplating, or going through, a bankruptcy and divorce in North Carolina. Creditors don't care about divorce agreements Your creditors are not bound by your separation or divorce agreement with your spouse. Your … [Read more...]

Reorganizing a Business with Chapter 11 Bankruptcy

My typical Chapter 11 client is a small to mid-sized, closely held and viable business with cash flow problems. The business offers either goods or services that are in demand,but needs to be reorganized in an orderly manner instead of haphazardly responding to creditor demands. The source of the financial problems varies; common problems include the decline of the housing market, growth and … [Read more...]

Receivership: North Carolina Bankruptcy Equivalent

While most people have some familiarity with the concept of bankruptcy under federal law, many people are unaware of the concept of receivership under North Carolina law. What is receivership? A federal bankruptcy judge oversees the bankruptcy case, with the help of the Bankruptcy Administrator. In a receivership, the North Carolina court appoints a receiver who is an officer of the court and … [Read more...]

Marital Property and Bankruptcy: Allocating Exempt Property

Each state has different laws on what is recognized as exempt property, that is, property that is out of the reach of creditors (including bankruptcy trustees). Further, there are federal exemptions. I wrote about this extensively and you may find it helpful reading. Here's the kind of question that occasionally comes up when we counsel a married couple about bankruptcy. Q: The exempt … [Read more...]