New North Carolina Homestead Exemption In Effect On December 1

by Adrian Lapas, Esq.

November 30, 2009

Effective tomorrow, December 1, 2009, North Carolina’s Homestead Exemption gets a marked increase.  The homestead exemption goes from $18,500.00 to $35,000.00 per debtor that can be exempted in real estate used as your primary residence.  Additionally, if you are over 65 years of age and your spouse (or possibly life partner) with whom you owned the property as tenants by the entirety (for spouses only) or Joint Tenants With Right of Survivorship (JTWROS), and your spouse or partner passed on before you, you can exempt up to $60,000.00 in equity in your residential real estate.

This is a dramatic increase in the homestead exemption over the past few years.  By increasing the homestead exemption, the General Assembly has recognized that homes are important to a functioning society and that most people’s wealth is tied up in their homes.  In particular, a driving factor behind the increase in the homestead exemption is older North Carolinians losing their homes to medical debts from a protracted illness .

After December 1, North Carolina bankruptcy filers will be able to exempt a signficant amount of equity that they have in their homes from the claims of creditors.  This will probably mean additional “zero-percent” chapter 13 plans and more “no-asset” chapter 7 cases filed in North Carolina as there is less non-exempt equity in property that must be paid to creditors.

If you are struggling with medical debt or other debts, please consult with one of the attorney’s in this network.  It does not hurt to find out your options while you still have some available.

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Adrian Lapas, Esq.

I've been practicing bankruptcy law in North Carolina since 1993, and am certified as a specialist in consumer bankruptcy law by the North Carolina State Bar.

Last modified: June 13, 2011