Exemption laws protect some property from being taken by creditors if a person is sued. They
vary from state to state.
Bankruptcy laws may use Federal exemptions or the same exemption
laws to protect property of debtors. Since these laws vary from state to state, what laws protect a banruptcy
debtor will be determined by where the individual filing for bankruptcy lives and has lived for the few years before
they file their bankruptcy case.
North Carolina exemptions apply to someone who files bankruptcy in the state
of North Carolina, if they have lived in North Carolina for two years or longer. If they have lived in North Carolina less
than two years, then either Federal Exemptions of the exemptions of a former state apply. The 2005 changes made if very
confusing for people who haven't lived in their state for at least two years, so you should have an experienced lawyer
advise you about your exemptions.
North Carolina Homestead Exemption: The North Carolina
Laws allow each resident to exempt (protect or withhold) from creditors, up to $35,000.00 equity in their residence, or
in the residence of their dependent.
If the debtor does not have a residence or does not need the entire $35,000.00
exemption in the residence, they can use up to $5,000.00 as a wildcard exemption in any type of property to the extent it
is not used for the residence.
You can think of the homestead exemption in North Carolina a little
differently and say that North Carolina has a homestead exemption per person of $30,000.00 to use exclusively on the
residence, that can be combined with the $5,000.00 wildcard for a total of $35,000.00 residential homestead exemption.
For example, if a resident claims $25,000.00 equity in their residence as exempt, they would still have up
to $5,000.00 wildcard to use elsewhere. If they claimed $32,000.00 equity in their residence as exempt, they would still have
$3,000.00 wildcard to use for some other property.
Additionally, some debtors who are over 65 years in
age may qualify to exempt up to $60,000.00 as their residence, depending on whether or not the property was previously co-owned
with a spouse or joint tenant who is now deceased. (See an attorney to discuss this since it is very specific on
If a debtor in bankruptcy has lived in North Carolina for at least two years, this exemption would
likely apply to them in either a Chapter 7, Chapter 11 or Chapter 13 case.
To learn about NC exemptions
and how they apply to you, please consult an attorney licensed in the state of North Carolina, and to know what exemptions
apply in bankruptcy cases, consult an experienced bankruptcy attorney. Not understanding the laws could have serious consequences.