What is a Bankruptcy Exemption in North Carolina?


Like all states, North Carolina has its own set of bankruptcy exemptions that you may use when filing for chapter 7 or chapter 13 bankruptcy. A bankruptcy exemption is a protected asset you are allowed to keep after you file for bankruptcy. Some states allow debtors to choose between the state exemption system or a set of federal bankruptcy exemptions. It is important to note that if you and a spouse are filing together, you may be able to double the amount of state-allowed bankruptcy exemptions.

Bankruptcy Exemptions by State

North Carolina is one of a handful of states that allows debtors to only claim state exemptions and not choose from the list of federal exemptions. Bankruptcy exemption rules differ by state and are specific to your place of residence. The following are just some of the examples of property that can be protected through an exemption in North Carolina:

  • Homestead
    • Real or personal property, including co-op, used as residence to $35,000, $60,000 if 65 or older and spouse is deceased (husband and wife may double); up to $5,000 of unused homestead may be applied to any property

  • Wages
    • Earned but unpaid wages received 60 days before filing for bankruptcy, needed for support may be exempt.

  • Personal Property
    • Animals, crops, musical instrument, books, clothing, appliances, household goods, and furnishings of up to $5,500 total; may add $1,000 per dependent, up to $4,000 total additional.
    • Motor vehicle up to $3,500.
    • Health Aids, such as a sleep apnea machine or prosthetic limb.
    • Burial plot up to $18,500, in lieu of homestead.

  • Personal injury recoveries for the person upon whom you were dependent for support
  • Wrongful death recoveries for the person upon whom you were dependent for support.
  • Alimony, child support, and separate maintenance are exempt if the debtor shows that such payments are necessary for support.

Utilizing your potential exemptions to the fullest and having an expert attorney can allow you to maintain a comfortable lifestyle post-bankruptcy. After filing for bankruptcy, you might feel like you’ve lost many of the luxuries that made life easier. However, keep in mind that maintaining a good amount of your property can make a huge difference and it’s worth sacrificing the amenities that eased daily tasks.

The proper utilization of North Carolina bankruptcy exemptions can have a dramatic impact on your stability during and after the bankruptcy process. These options leave you with something familiar during a stressful time in your life. Utilizing these exemptions correctly and efficiently also allows you to maintain your life, while you work towards rebuilding your credit, leading you on a path towards a healthy financial future. Make sure you have an experienced bankruptcy attorney to guide you through this important process

Federal Nonbankruptcy Exemptions

Although in North Carolina, you can not use the exemptions found in the U.S. Bankruptcy Code, you may be entitled to federal nonbankruptcy exemptions which are a set of exemptions that apply to people throughout the country if they choose to, or in the state of North Carolina, are required to utilize state exemptions instead of federal exemptions. The three most significant nonbankruptcy exemptions are:

  1. Social Security benefits
  2. Civil Service Benefits
  3. Veterans Benefits

Knowing your options is important when filing for bankruptcy, and having someone who is a legal expert in bankruptcy law is essential to making it through a bankruptcy filing successfully.

Know Your Exemption Status

It would be best to consult a bankruptcy attorney to discuss your specific situation and your potential options. Filing for bankruptcy does not mean losing all of your possessions and having to start completely from scratch. Though it may seem stressful and confusing, an experienced, top-rated bankruptcy attorney, like our legal professionals at Ivey McClellan, can help you to maximize your exemptions and help you get through your bankruptcy filing and start again on the right foot. Contact us to discuss your options today

Office Locations


100 South Elm Street Suite 500
Greensboro, NC 27401
Phone: 336-274-4658
Fax: 336-274-4540


551 Monroe Street
Eden, NC 27288
Phone: (336) 623-4600

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