What Property Is Exempt (Protected) In North Carolina?
By Susanne Robicsek, North Carolina Bankruptcy Attorney on Mar 12, 2007 in Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, General Bankruptcy Information, North Carolina, Protecting Assets In Bankruptcy
When you file a Chapter 7 bankruptcy, you are entitled to keep property that is exempt, and you may give up any property that is not. Exempt property is property that is protected from creditors if you are sued and also if you file bankruptcy.
Under the old bankruptcy laws, you used the exemptions of the state the bankruptcy case was filed in. Under the current laws, what you can keep depends on where you live and how long you have lived there. We’ve already discussed what property you can keep when you file for bankruptcy, and I hope you’ll take the time to read that post once you’re done with this one.
If you have lived in North Carolina for at least two years, you will use North Carolina exemptions. If you have lived in North Carolina for less than two years, you may be required to use the exemptions of the state where you used to live; you may also be required to use the federal exemptions.
Exactly what law applies should be determined by an experienced bankruptcy lawyer licensed to practice in the state in which you will be filing your case. Bad advice can cost you thousand of dollars or, even worse, the loss of some property that would otherwise be protected.
Many web sites provide incorrect exemption information. That’s because these sites are often published by non-attorneys or by lawyers who don’t know the laws of all states.
In North Carolina, the major exemptions include up to $18,500 of equity a residence (more for someone widowed under some circumstances). If you don’t use the entire residential exemption you can get up to $5,000 in any type of property (that’s called a “wild card” ). You can also get an exemption of up to $5,000 in household goods and $3,500 of equity in a motor vehicle. Additional exemptions include your salary needed to support a family, for various retirement accounts, medical items, insurance policies, and other things.
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