Whether you are getting harassing phone calls from creditors, or you’re being sued by them, by taking the right steps now, you can maximize the property you can protect. We have all heard rumors about changing the names on the deed of the house, or transferring title to a vehicle out of your name, but what are the facts?

There Are Judgment-Proof Individuals

In North Carolina, you are judgment-proof when by virtue of the laws of the General Assembly, creditors have no legal way to collect on the amount you owe. North Carolina has a set of state exemptions which individuals can apply to their property. These are essentially dollar value thresholds for equity in homes and vehicles, the value of personal property, and balances in checking accounts. If your property falls within the threshold the creditor cannot take it.

Jointly Owned Property

In North Carolina, the tenancy by the entirety (or entireties) is a form of real property ownership. It is created when a married couple simultaneously takes title to real estate by deed conveyance. This form of property ownership protects each spouse against the actions of the other—both spouses are required to transfer title at a later date. In addition, the creditors of one spouse cannot force the sale of property held as tenancy by the entireties. Lastly, a judgment obtained by a creditor of one spouse only will not attach to the property. This means you can refinance or sell that property without being forced to pay that judgment.

If your debt is jointly ‘owned’ by you and your spouse, the creditor would have access to the property held as tenancy by the entireties. Quite often, clients believe they have jointly owned debt with a spouse when in fact one spouse owns the debt and the other spouse is simply an authorized user of the credit card or account.

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