What Property Is Exempt (Protected) In North Carolina?

12 Mar What Property Is Exempt (Protected) In North Carolina?

Many people who would benefit from bankruptcy, spend a lot of effort toavoid filing bankruptcyfor various reasons.

Just a few are: they don’t realize how bad their situation is, they are embarrassed or think it is wrong, they don’t understand how it works, or they think they will loose everything that they own.

Many people keep everything they own in bankruptcy.

Bankruptcy exemptionsdictatewhat you’re allowed to keep when you file Chapter 7or Chapter 13. What you get to keep depends on where you live when you file your bankruptcy case. and how long you have lived there.

  • Exempt property is property that is protected from creditors if you are sued and also if you file bankruptcy.

You are entitled to keeppropertythat is exempt, but you may be forced to give up any property that is not if you don’t pay your creditors to keep it.

I’ve discussed a little bit about what property you can keep when you file for bankruptcyin another article I wrote, but I will write a little about the exemptions for North Carolina, thestate I live in – although some of the general principals and explanations may apply for those of you in other states.

For those who file bankruptcy in NC, 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, OR you may also be required to use the federal exemptions, OR even another state you have lived in.

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. Some of the exemptions are together in one place, but there are many hidden exemptions too that aren’t that easy to find.

In North Carolina, the major exemptions include:

Homestead: up to $35,000 of equity a residenceper owner (more for someone widowed under some circumstances).

Wildcard: 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” ).

Household goods and vehicle: 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 limited salary needed to support a family, various retirement accounts, medical items, insurance policies, some claims, and other things.

It is important to discuss all your assets with your bankruptcy attorney, because some of the exemptions can be incorrectly applied if you don’t have the legalknowledgeto know what the law protects for you.


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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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