Q: Personal Gurantees for Commercial loans, what can the bank go after?

A: If there is a personal guarantee of a business loan, if the business does not pay then the bank or lender can sue the guarantor. The lender, if it wins a judgment, can recover the same as in any other civil case against a debtor. NC law allows an individual person (not a corporation)to exempt certain property from execution (seizure by the sheriff). In order to first collect, the judgment creditor would have to serve the individual judgment debtor with papers called a "notice of rights to have exemptions designated" and "motion to claim exempt property." The debtor then has 20 days to fill out and file the exemptions with the court.

While this list is by no means exhaustive, the debtor can generally exempt: $30,000 of equity in any one piece of real property; $5,000 for personal property (clothes, furniture, etc.), $1,000 for each dependent child up to a maximum of $4,000; $3,500 equity in any one motor vehicle; a bonus wild card exemption of $5,000 which the debtor can use for anything not exempted anywhere else. There are a few other exemptions, but these are the ones that apply to most people. These exemptions only apply to things in your name or which are jointly held with another person. There also may be other exemptions under other laws which might apply. There is no wage garnishment in NC for most debts.

If you are concerned about asset protection and exemptions, I suggest you consult with an attorney to review your situation. Please contact me at rachelforjustice@hotmail.com if interested. I give free email consults. There is a charge for phone or in-person consults.