Filing Bankruptcy In North Carolina

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Filing bankruptcy in North Carolina is often necessary, if residents have made poor financial decisions, been laid off, had work hours cut, or experienced some economically devastating emergency.  While some people need to file straight bankruptcy and get a fresh start, others need help to restructure payments to a more affordable amount.

Options for Personal Bankruptcy in North Carolina

All states adhere to the U.S. Bankruptcy Code, Title 11.  Individuals in North Carolina can file under Chapter 13 or Chapter 11 bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as the fresh start bankruptcy.  In the rare event that applicable assets remain, a court trustee will sell the property and disperse the funds to all creditors equally.  The debtor will be required to take a means test, to prevent anyone capable of paying bills from taking advantage of the court.  Then, all remaining and applicable debt will be expunged, except for expenses like child support, court fines, and student loans.  In North Carolina, the average single earner makes $38,478, a two-person household makes $52,355, and a family of three makes $57,301.

Chapter 13 Bankruptcy

For debtors that want to pay their bills and retain their assets, Chapter 13 bankruptcy serves to restructure payments to a more affordable amount.  The court will negotiate with creditors to determine the least amount acceptable to satisfy the debt.  For example, the interest and extra fees are deducted from the amount owing.  Then, as long as the debtor keeps current bills paid and gives the court the restructuring payment to be dispersed, he/she keeps all assets.  However, the debtor cannot have more than $1,010,650 in secured debt and $336,900 in unsecured debt.

Filing Bankruptcy during Foreclosure

Unfortunately, filing bankruptcy after foreclosure proceedings have been initiated may only delay the inevitable. The court will put a stay on all attempts to collect money, until a final determination is made.  But, a lien holder can request that the stay be lifted, so the property can be sold.  The best course of action is to consult a bankruptcy lawyer before anything is filed.  Legal advice helps the debtor understand the options available for debt relief and the potential for retaining assets.

North Carolina Bankruptcy Exemptions

North Carolina has specific exemptions, the debtor can claim, that cannot be touched by bankruptcy proceedings.  The following chart is a partial list of applicable assets:

Type of Asset(s)

Details on Applicable Exemption(s)


Co-ops or other property used as residence-up to $10,000, $3500 worth of homestead can also be applied as other property. Tenancy property is exempt-if debts are attributable to only one spouse


Fraternal and society benefits and group life insurance


Property of a partnership business


Teachers and state employees, firefighters, police officers, city, county, and state employees-including legislators

Personal Property

Burial plot up to $10,000, personal items, household goods, animals and crops totally $3500 (add $750 for each dependent, up to $3000 additional) old car worth no more than $1500, health aids, personal injury and wrongful death benefits used for support

Public Benefits

AFDC, crime victims, workmen’s, and unemployment compensation, aid to the blind


All unpaid wages earned 60 days before filing bankruptcy that is needed for support


North Carolina Bankruptcy Court Filing Options

Need Bankruptcy Advice?

Use a Bankruptcy Lawyer

Filing without the counsel of a bankruptcy lawyer is strongly discouraged.  Under the stressful circumstances of court, legal representation can answer important questions of the court, make sure all of the appropriate paperwork is in order, ask for all applicable exemptions, and look out for the best financial interests of the debtor.  If not everything is in order, the case can be thrown out and the debtor could be charged with fraud, in the event a large financial mistake is discovered.

Use a Filing Service

Although a filing service saves money, the workers may not comply with all of the regulations.  No one is available to answer questions or give advice during the court proceedings.  If a mistake is made in the data, the debtor is held responsible.  A filing service is not recommended.

File “Pro Se”

Debtors may choose self-representation in court.  Thus, they file pro se.  However, this option is foolhardy at best, unless the individual has a detailed understanding of North Carolina bankruptcy laws.  Applicable benefits and exemptions are likely to be missed, legal issues misunderstand, and the overall outcome less favorable for the debtor.

Courts and North Carolina Bankruptcy Trustee Information

North Carolina Eastern District Court Main Office

574 Terry Sanford Federal Bldg
310 New Bern Avenue
Raleigh, NC 27601-1418

North Carolina Middle District Court Main Office

L. Richardson Preyer Federal Bldg,
Suite 1
324 West Market Street
Greensboro, NC 27401-7455

North Carolina Western District Court Main Office

210 Charles R. Jonas Federal Bldg
401 West Trade Street
Charlotte, NC 28202