Filing Bankruptcy in North Carolina

Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including North Carolina. However, state law plays an important role, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.

Credit Counseling

Before you file for Chapter 7 or Chapter 13 bankruptcy in North Carolina, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of agencies in North Carolina that have been approved to provide this counseling. 

Where to File

The North Carolina bankruptcy courts are divided into three districts -- the Eastern District, the Middle District, and the Northern District. At each of these districts' websites, you can find information on forms, local rules, and more.

Property Exemptions

Like every other state, North Carolina has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)

In North Carolina, you must use the state’s exemption list; although some states allow debtors to choose between the state list and a federal list, North Carolina isn’t one of them.

North Carolina has a homestead exemption for real or personal property used as a residence. The exemption amount is $35,000, or $60,000 if you are 65 or older. Instead of using the homestead exemption, you can exempt up to $18,500 in a burial plot. In North Carolina, you can also exempt a motor vehicle to $3,500, health aids, college savings accounts, and various items of personal property, among other things. Here’s a list of North Carolina exemptions.

The Means Test

When you file for bankruptcy, you must compare your income to the median income for a household of your size in North Carolina. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).

Currently, the median North Carolina income for a one-person household is just under $38,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.

Debtor Education

After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of agencies approved to provide this course in North Carolina.

Getting Help From a Bankruptcy Lawyer

If you're considering bankruptcy, you may want to talk to an experienced North Carolina bankruptcy lawyer.