There are many contributing factors that are associated with financial adversity. The most common reasons include heavy debt, foreclosure, divorce, serious illness, or sudden unemployment.

In fact, the average credit card debt in North Carolina is a whopping $5,353 per person. In addition, foreclosure rates are also as staggering, one out of every 1,732 NC homes is currently in foreclosure.

If you find yourself struggling with similar situations, then you are probably dealing with other personal issues that come with living in debt. The fear of losing your vehicle, house or your income can drain a person mentally & physically. You may have even considered Filing for Bankruptcy .

If you are thinking “Can I File Bankruptcy?” you are surprisingly not alone. Around a million people file bankruptcy each year in the US. Bankruptcy is a device created by the US Government to help struggling Americans find relief from heavy debt. You may want to research bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy offers people the chance to resolve their debt while still working with lenders in a legal capacity. It is started by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is done, the filer will ‘exit’ with a fresh new start.

Throughout the bankruptcy, a trustee is appointed to oversee the deatils of the matter. His or her duties differ and depend on whether the person has filed for Chapter 7 or Chapter 13 bankruptcy.

Did you know that North Carolina ranks #38 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 167 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

People in North Carolina, who claim bankruptcy, will elect to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. What is the difference? Take a look at the descriptions below for more information:

Chapter 7

The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.

Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation

Chapter 13

If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year period.

In order to decide which chapter an individual will file, he or she will have to determine their ability to repay under the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

For those who do not qualify for a Chapter 7 filing, he or she will be able to file for Chapter 13, as described above.

What Are Bankruptcy Exemptions?

Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.

Unless otherwise noted, all law references are to the  General Statutes of North Carolina.


  • Real or personal property used as a residence, including co-op, up to $35,000; $60,000 if 65 or older, the property is owned as tenants by the entirety or joint tenants with right of survivorship, and spouse has died;Tenancies by the entirety exempt without limit as to debts of one spouse

Personal Property

  • Motor vehicle up to $3,500; health aids; clothing, household goods, furnishings, appliances, books, animals, musical instruments and crops up to $5,000 total, plus additional $1,000 per dependent up to $4,000 total (all property must have been purchased at least 90 days before filing); personal injury and wrongful death recoveries for a person you depended upon; college savings accounts that were established under 26 U.S.C. § 529 up to $25,000. There are some contributions within the prior year that are excluded.
  • Burial plot up to $18,500, in lieu of homestead.


  • Earned but unpaid wages received 6O days before filing for bankruptcy.


  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans)
  • IRAS and Roth IRAs to $1,283,025, including inherited IRAs (most states don’t exempt inherited IRAs).
  • Retirement benefits from another state to the extent that they are exempt in that state; Roth IRAs and IRAs.
  • Firefighters and rescue squad workers.
  • Legislators.
  • Municipal, city, and county employees.
  • Teachers and state employees.
  • Law enforcement officers.

Public Benefits

  • Crime victims’ compensation.
  • Unemployment compensation.
  • Workers’ compensation.
  • Public assistance under work first program.
  • Aid to blind.

Tools of Trade

  • Tools, books, and implements of trade up to $2,000.


  • Life insurance for children or a spouse.
  • Employee group life policy or proceeds.
  • Fraternal benefit society benefits.


  • Alimony and child support needed for support.
  • Support that a surviving spouse has recieved for 1 year up to $10,000.
  • Business partnership property.


  • $5,000 of unused homestead or burial plot exemption
  • $500 of any personal property

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

You are not required by law to hire an attorney to declare relief. Individuals are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not an easy task.

Filing Bankruptcy without an Attorney

A simple Chapter 7 filing that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that doesn’t involve an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

For most people, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy attorney is there to represent you and not the creditors.

An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in NC, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In North Carolina

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In North Carolina

Federal Law Center
101 South Edgeworth Street
Greensboro,NC 27401
North Carolina Middle Bankruptcy Court

United States Courthouse
226 South Liberty Street
Winston Salem,NC 27101
North Carolina Middle Bankruptcy Court

United States Post Office
200 West Broad Street
Statesville,NC 28677
North Carolina Western Bankruptcy Court

Charles R. Jonas Federal Building
401 West Trade Street
Charlotte,NC 28202
North Carolina Western Bankruptcy Court

Gateway Plaza Building
402 West Trade Street
Charlotte,NC 28202
North Carolina Western Bankruptcy Administrator

United States Courthouse
100 Otis Street
Asheville,NC 28801
North Carolina Western Bankruptcy Court

Reade Circle
150 Reade Circle
Greenville,NC 27858
North Carolina Eastern Bankruptcy Administrator

Century Station
300 Fayetteville Street
Raleigh,NC 27601
North Carolina Eastern Bankruptcy Court


Additional North Carolina Resources

Foreclosure Help Program

Disability SSDI Benefits