Bankruptcy Lawyer Bryan W. Stone answers the question: “Will I lose my property if I file for bankruptcy?”
If you are reluctant to file for bankruptcy because you are concerned about losing your belongings and property, you should take comfort knowing that some of your assets can be exempt from bankruptcy seizures in North Carolina.
In addition, you may also be able to qualify for federal exemptions to shield some of your assets from being seized. To discuss exemptions in your particular situation, schedule a personalized consultation with our North Carolina bankruptcy attorneys at Arnold & Smith, PLLC.
Exempt Assets When Filing for Bankruptcy in North Carolina
The following assets are exempt from bankruptcy seizures in North Carolina:
- Automobile. Under C.G.S. § 1C-1601, you can exempt a motor vehicle if its value does not exceed $3,500.
- Home. When you use your real property as a residence, it would be exempt from seizures after filing for bankruptcy. However, under North Carolina law, only up to $35,000 of property value will be exempt if you are under the age of 65. Unmarried debtors aged 65 and older can exempt up to $60,000 of their home’s value.
- Burial plot. If you have not used the homestead exemption, you could exempt no more than $35,000 in the equity of land where your body will be buried after your death.
- Household goods, clothing, furniture, and others. Under North Carolina’s “Exempt Property” statute, a total of $5,000 for household goods, appliances, clothing, furniture, animals, musical instruments, and some other items qualify for an exemption. Also, the debtor can exempt an additional up to $1,000 for each dependent, but not exceeding $4,000 in total additional exemptions.
- Tools and implements of the trade. Debtors can also protect up to $2,000 worth of tools and implements involved in the trade of the debtor or debtor’s dependent.
- Funds in a college savings plan. Under North Carolina law, up to $25,000 in funds placed in college savings accounts qualified under Internal Revenue Code Section 529 are exempt from bankruptcy seizures, excluding any funds that were placed in those accounts in the past 12 months.
- Wages. Some of your wages will not be seized because state law provides an exemption for any wages earned for the debtor’s work done 60 days before filing for bankruptcy, according to C.G.S. § 1-362. Also, federal law provides additional restrictions on wage garnishments (see 15 U.S. Code § 1673).
- Pensions of qualifying employees. North Carolina law also exempts pensions of city, state, municipal, and county employees. The exemption also applies to teachers, law enforcement officers, legislators, and firefighters.
- Public benefits. Public benefits exempt from bankruptcy seizures are unemployment and workers’ compensation benefits, future Social Security benefits, veterans benefits, compensation for crime victims, aid to the blind, and benefits for families with dependent children.
- Business property. Some of your business assets may be exempt depending on how the business is owned. Talk to an experienced bankruptcy lawyer to determine whether exemptions will apply to your business property.
The exemptions for purchased assets, properties, and items mentioned above are not applicable if the assets were acquired within 90 days of filing for bankruptcy and all details related to a bankruptcy should be carefully reviewed by an experienced bankruptcy attorney.
Consult with our bankruptcy attorneys at Arnold & Smith, PLLC, in North Carolina to determine what types of assets would be exempt from bankruptcy seizures in your particular situation. Get a phone 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.
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