© 2015 by The Law Office of Stephen B. Carruthers.

11 USC 528 Disclosure:  The Law Office of Stephen B. Carruthers is a debt relief agency that helps clients file for bankruptcy relief under the Bankruptcy Code. The information on this website is not, nor is it intended to be, legal advice. In order to obtain legal advice regarding your specific situation you are encouraged to contact an attorney. No contact information received through this website will be handed out or sold to any second party.


Serving the following North Carolina Counties: Henderson, Transylvania, Polk, Buncombe, Avery, Mitchell, Yancey, Madison, Haywood, Jackson, Macon, Clay, Swain, Graham, Cherokee, McDowell, Burke, Rutherford & Cleveland.

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Exemptions refer to the amount of property that you may "exempt" from the reach of your creditors.  One of the purposes of exemptions is to allow debtors to retain enough property to assist them with their "fresh start" as they emerge from bankruptcy.  Exemptions are important in chapter 7 and chapter 13 cases.  In a chapter 7 case, any non-exempt assets are liquidated by the trustee in order to repay creditors.  In a chapter 13 case, creditors are entitled to receive at least as much as they would have received in a chapter 7.  Therefore, over the life of the plan, creditors in a chapter 13 are paid the value of any non-exempt assets.

If you have lived in North Carolina for the past two years, you will most likely use North Carolina's set of exemptions.  If you recently moved to the state or have lived here intermittently during the past two years, you might use a different state's set of exemptions, or the federal set of exemptions.  Below is a brief synopsis of some of the North Carolina exemptions, however, this list is not exhaustive of all available exemptions and is instead a description of some of the more common exemptions used by debtors: 


  • Homestead (residence):     $35,000 in equity per debtor in property you or your dependent use as a residence, including a mobile home ($70,0000 in equity for married couples filing jointly).  An unmarried debtor over the age of 65 may claim an exemption not to exceed $60,000 in value, so long as the property was previously owned by the debtor as a tenant by the entireties or as a joint tenant with rights of survivorship and the former co-owner of the property is deceased.


  • Vehicles:     $3,500 in equity in a single vehicle.


  • Furniture and other household goods:     $5,000 for your furniture and other household goods plus an additional $1000 for each dependent (but not to exceed an additional $4,000). This includes furniture, clothes, books, appliances and musical instruments, if used primarily for family or household use. 


  • Wildcard:    $5,000 of your unused homestead (residence) exemption, which can be applied to any property, including a second vehicle.


  • Tools of the trade:     $2,000 in any implements, professional books, or tools of the trade of the debtor or the debtor's dependent.


  • Alimony and child support:     Any amount to the extent the payments or funds are reasonably necessary for the support of the debtor or any dependent of the debtor.


  • Life Insurance:     No dollar amount limit if the debtor's spouse or child is listed as the beneficiary.


  • Health aids:     Professionally prescribed health aids for the debtor or the debtor's dependent.


  • Compensation for personal injury:     Includes workers' compensation, but such funds are not exempt from claims for funeral, legal, medical, dental, hospital, and health care charges related to the accident or injury.


  • Retirement accounts:     No dollar amount limit for funds in IRA's and most other retirement accounts including 401(k) plans and ERISA qualified plans.  


  • College saving accounts:     $25,000 in a qualified 529 plan, but only to the extent that the funds are for a child of the debtor and will actually be used for the child's college or university expenses.  Funds placed in the account during the 12 months preceding the petition date my not be exempted unless the contributions were made in the ordinary course of the debtor's financial affairs and were consistent with the debtor's past pattern of contributions. 


  • Wages:     Wages earned within the 60 days preceding the petition date are exempt to the extent they are necessary for the support of the debtor and the debtor's dependents. 


  • Tenancy by the entirety property:     Any real property owned by a married couple as tenants by the entirety is exempt from the reach of creditors of only one spouse.