North Carolina Bankruptcy Exemptions
What Can I Keep When I File for Bankruptcy?
The main reason people avoid bankruptcy is the fear that they will lose everything they own in the process. A fresh start may be appealing, but walking away with nothing to your name will hardly feel like an opportunity for financial security. Fortunately, North Carolina permits those who file for bankruptcy to claim certain properties as exempt. These assets will not be sold in the process of repaying your creditors.
The type of bankruptcy proceeding you choose is closely related with your exemptions, so enlisting the help of an experienced attorney is essential. At the Law Office of Kimberly A. Sheek, I will answer every question you have about filing for bankruptcy. My goal is for you to understand each step of the proceeding, as well as what life may look like afterward. Together, we can protect as many of your assets as possible to ensure you have what you need to build a better future.
To learn more about bankruptcy exemptions in North Carolina, and how they could affect your case, call (704) 842-9776.
Claiming Exemptions: Chapter 7 vs. Chapter 13
Chapter 7 bankruptcy can discharge most or all your debt, including credit card debt, medical bills, personal loans, and other debts from lawsuits or collection agencies. This proceeding is commonly referred to as liquidation bankruptcy because the court uses your assets as a means of paying your creditors.
North Carolina laws outline common exemptions debtors claim when they file Chapter 7 bankruptcy:
- Homestead/burial plot (property used as residence or tenancy): up to $35,000, $60,000, or $70,000 depending on certain circumstances, such as whether you are filing individually, jointly, or as a widow
- Wildcard: up to $5,000 of any unused portion of homestead/burial exemption, transferred to an asset of your choice
- Motor vehicle: up to $3,500 for one vehicle (unless it was purchased within 90 days of filing bankruptcy)
- Personal property: up to $5,000 plus $1,000 per dependent (max of 4)
- Qualified college savings accounts: up to $25,000
- Tools of trade: up to $2,000
- Insurance (illness insurance, employee group life insurance, or proceeds that benefit the deceased debtor’s children/spouse)
- Public benefits (unemployment or workers’ compensation, veterans’ benefits, future Social Security, crime victims’ compensation, and aid to the blind and families with dependent children)
- Wages (earned but unpaid for work done 60 days before filing)
- Child support or alimony (if necessary for support)
- Most retirement plans and pensions
- Personal injury/wrongful death compensations
- Prescribed health aids
If your income is greater than the median household income in North Carolina, you will not qualify for Chapter 7. Instead, you may file for Chapter 13. Commonly referred to as reorganization bankruptcy, this proceeding requires you to pay most of what you owe through a manageable repayment plan. You will likely keep most of your possessions, including your home and vehicle. Keep in mind, however, that any property not covered by exemptions will increase the amount you need to repay.
Contact My Firm for One-On-One Support
When you begin a bankruptcy proceeding, all collection actions—from phone calls, to repossession, to foreclosure—must stop. For many of my clients, this sudden freedom from creditor harassment provides profound relief, even before the burden of their debt is officially lifted. I, Kimberly A. Sheek, am ready to listen to your story, answer your questions, and resolve your concerns. Together, we will come up with a plan to minimize your payments, maximize your exemptions, and regain control over your financial well-being.
Call the Law Office of Kimberly A. Sheek at (704) 842-9776 to schedule your free consultation today.