Bankruptcy Exemptions in North Carolina

Bankruptcy attorney Ben Tobey answering the question: Can i transfer nonexempt property out of my name before filing bankruptcy to protect it?


Whether we like to admit it or not, we Americans live in a capitalist society. Our culture values wealth and property accumulation, and our nation’s financial sector has created multiple different tools and avenues to help citizens build wealth. While debt instruments such as credit cards and loans exist to help us grow our finances, if we are not responsible or fall victim to circumstances we may end up looking for an experienced bankruptcy attorney.


home-sale-Charlotte-Monroe-Mooresville-Bankruptcy-attorney-300x200While filing for bankruptcy is not a decision that should be taken lightly, there are times when filing for Chapter 7 or 13 bankruptcy makes sense. When this happens, individuals will want to understand what types of property are exempt from being sold by a court-appointed trustee to pay your debts.


While consultation with an experienced bankruptcy attorney is always the best course of action, there are some pieces of general information that all North Carolina residents should have on bankruptcy exemptions in their state.


The Homestead Exemption in North Carolina


Under North Carolina law, the equity a person has built up in their home is protected by what is known as the “Homestead Exemption.” Under this exemption, up to $35,000 of equity in any real or personal property used as a residence is exempt from collections when filing for bankruptcy. If both spouses are on the title to the home, the exemption is doubled.


Motor Vehicle Exemptions in North Carolina


North Carolina law also provides a bankruptcy exemption for motor vehicles. Under this exemption, motor vehicle owners can exempt up to $3,500 in one vehicle. However, if you purchased the vehicle within 90 days of filing for bankruptcy, you are not able to use this exemption.


Exemption of Other Personal Property in North Carolina


While equity in homes and motor vehicles are among the most common types of bankruptcy exemptions pursued by North Carolina residents, other types of lesser-known exemptions also exist.  Examples of other personal property exemptions in North Carolina include:


  • An exemption for clothing and other household items such as furniture and appliances. In addition, parents are eligible to claim a $1,000 exemption per dependent, up to a total of $4,000. However, as with the motor vehicle exemption above, this exemption does not apply to anything purchased within 90 days of filing for bankruptcy.
  • Eligible college savings accounts, up to $25,000. In addition, specific exemptions apply for contributions made over the past 12 months.


When to Contact a Professional


The intent of bankruptcy law is to help individuals get out of debt, not to punish them for their misfortune. Bankruptcy exemptions are one way to help those in serious debt lower the burden after beginning the process of filing. To maximize the efficiency and lower the stress of the bankruptcy process, many individuals turn to the services of an experienced bankruptcy attorney in their area.


For years, the attorneys at Arnold & Smith, PLLC have been helping residents in Charlotte and North Carolina navigate the process of filing for bankruptcy. Contact Arnold & Smith, PLLC today for guided insight into your unique situation. Get a phone, in-person or video consultation by calling at (704) 370-2828 to speak with our detail-oriented and well-versed lawyers, or fill out our contact form. Now taking cases throughout North Carolina with offices in Uptown Charlotte, Mooresville and Monroe.





Image Credit:



See Our Related Video from our YouTube channel:



See Our Related Blog Posts:

Weird State-Specific Bankruptcy Exemptions


Seven Questions to Ask Your Charlotte Bankruptcy Lawyer if You are Considering Filing Bankruptcy

Contact Information