§ 1C-1604. Effect of exemption. - North Carolina Statutes

§1C‑1604.  Effect of exemption.

(a)        Property allocatedto the debtor as exempt is free of the enforcement of the claims of creditorsfor indebtedness incurred before or after the exempt property is set aside,other than claims exempted by G.S. 1C‑1601(e), for so long as the debtorowns it. When the property is conveyed to another, the exemption ceases as toliens attaching prior to the conveyance. Creation of a security interest in theproperty does not constitute a conveyance within the meaning of this section,but a transfer in satisfaction of, or for the enforcement of, a securityinterest is a conveyance. When exempt property is conveyed, the debtor may haveother exemptions allotted.

(a1)      The statute oflimitations on judgments is suspended for the period of exemption as to theproperty which is exempt.  However, the statute of limitations is not suspendedas to the exempt property unless the judgment creditor shall have, prior to theexpiration of the statute of limitations, recorded a copy of the orderdesignating exempt property in the office of the register of deeds in thecounty where the exempt real property is located.

(b)        Exempt propertywhich passes by bequest, devise, intestate succession or gift to a dependentspouse, child or person to whom the debtor stands in loco parentis, continuesto be exempt while held by that person. The exemption is terminated if thespouse remarries, or, with regard to a dependent, when the court determinatesthat dependency no longer exists. (1981, c. 490, s. 1; 1991, c.607, s. 2.)