Like all states, North Carolina has its own set of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy. Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions – but North Carolina is not one of them. In North Carolina, you must use the state exemptions below. In addition to this list, you may also use any applicable amounts in the federal nonbankruptcy exemptions.
Unless noted otherwise, if a couple is married and filing jointly in North Carolina, each spouse may claim the full amount of each exemption. This is informally called “doubling.”
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
North Carolina Bankruptcy Exemptions
Unless otherwise noted, all law references are to the General Statutes of North Carolina.
1C-1601 - Real or personal property used as a residence, including co-op, up to $35,000; $60,000 if 65 or older, the property is owned as tenants by the entirety or joint tenants with right of survivorship, and spouse has died;Tenancies by the entirety exempt without limit as to debts of one spouse [In re Crouch, 33 B.R. 271 (E.D. N.C. 1983)].
1C-1601 - Motor vehicle up to $3,500; health aids; clothing, household goods, furnishings, appliances, books, animals, musical instruments and crops up to $5,000 total, plus additional $1,000 per dependent up to $4,000 total (all property must have been purchased at least 90 days before filing); personal injury and wrongful death recoveries for a person you depended upon; college savings accounts that were established under 26 U.S.C. § 529 up to $25,000. There are some contributions within the prior year that are excluded.
1C-1601 - Burial plot up to $18,500, in lieu of homestead.
1-362 - Earned but unpaid wages received 6O days before filing for bankruptcy.
11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,150.
1C-1601 - Retirement benefits from another state to the extent that they are exempt in that state; Roth IRAs and IRAs.
58-86-90 - Firefighters and rescue squad workers.
120-4.29 - Legislators.
128-31 - Municipal, city, and county employees.
135-9 & 135-95 - Teachers and state employees.
143-166.30 - Law enforcement officers.
15B-17 - Crime victims' compensation.
96-17 – Unemployment compensation.
97-21 - Workers' compensation.
108A-36 – Public assistance under work first program.
111-18 - Aid to blind.
Tools of Trade
1C-1601 - Tools, books, and implements of trade up to $2,000.
1C-1601 - Life insurance for children or a spouse.
58-58-165 - Employee group life policy or proceeds.
58-24-85 - Fraternal benefit society benefits.
1C-1601 - Alimony and child support needed for support.
30-15 - Support that a surviving spouse has recieved for 1 year up to $10,000.
59-55 - Business partnership property.
1C-1601(a)(2) - $5,000 of unused homestead or burial plot exemption
Const. Art. X, § 1 - $500 of any personal property
Add any applicable Federal Nonbankruptcy Exemptions.
This list includes the majority of bankruptcy exemptions available in North Carolina. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, North Carolina may have changed the amounts since this list was last updated in June of 2011. Consider cross-checking this list with www.legalconsumer.com, which updates the state exemption amounts regularly, or check with your local bankruptcy court.