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As a bankruptcy attorney in Raleigh, NC who’s handled 15,000+ cases, I know how stressful
debt can be.
If you’re like many people you’re probably worried that filing for Chapter 7
bankruptcy means losing everything.
But the truth is, bankruptcy doesn’t mean you’ll be left with nothing.
In fact, North Carolina law allows you to protect essential property through bankruptcy
exemptions, so you can still have the basics you need to live and work. Below is an
overview.
The Basics: What Are Bankruptcy Exemptions?
So, first things first: When you file for Chapter 7 bankruptcy, many people believe that some of
your assets might be sold to pay off creditors.
Bankruptcy exemptions are laws that let you keep certain property,even if you file for Chapter 7 bankruptcy.
These exemptions vary from state to state, and North Carolina has its own set of rules to
help you hold onto your home, car, and other important possessions.
Let me walk you through the main exemptions that could apply to you:
1.Homestead Exemption: Protecting Your Home
If you own a home, the homestead exemption is a big one—it helps you keep your house.
- How Much It Protects
You can protect up to $35,000 in equity in your home. If you’re
married and filing jointly, that doubles to $70,000. If you’re 65 or older and you are the
surviving spouse on the home, you can protect up to $60,000.
- How it Works
The equity in your home is the difference between what your house is worth and you owe on your mortgage. So if your house is worth $310,000 and you owe $280,000, you have $30,000 in equity.
The homesterd exemption will cover that, and you can continue to live in your home.
2. Motor Vehicle Exemption: Keeping Your Car
The motor vehicle exemption covers your car, which for most people, is essential for getting
to work, taking the kids to school, or running errands.
- How Much It Protects
You can protect up to $3,500 in equity in your car, and there is a wildcard that you may use to protect additional equity up to $5,000 per person.
- Things to Know
sust like with your home, l’s the equity that maters here-so if you awe les on
your car than it’s worth, that difference is your equity. If your car is worth $6,000 but
you still owe $3,000 on the loan, you’ve got $3,000 in equity, which fits under the exemption.
3. Personal Property Exemption: Household Goods
The personal property exemption protects the stuff you use everyday-things like furniture,
clothes, appliances, and other household items.
You won’t have to worry about losing the basic things that make your house a home. No
one’s coming to take your couch or your refrigerator.
- How Much It Protects
You can protect up to $5,000 in personal property.
4. Tools of the Trade Exemption: Protecting Your Livelihood
If you need specific tools or equipment for your job, the tools of the trade exemption lets
you keep them. This is especially helpful if you’re self-employed or run a small business. If you’re a
contractor, mechanic, photographer, or anyone who relies on special tools to make a living,
this exemption ensures you can continue to work.

- How Much It Protects: You can protect up to $2,000 worth of tools or equipment.
5. Wildcard Exemption: A Little Extra Cushion
This is like a catch-all exemption that you can use for any property that doesn’t fit neatly
into the other categories.
This gives you flexibility. Whether you have a second vehicle or something else of value
that’s important to you, this wildcard exemption provides an extra layer of protection.
- How Much It Protects
You can protect up to $5,000 of additional assets, but only if you haven’t used the
full homestead exemption.
6. Retirement Accounts and Public Benefits: Safe for Your Future
Your retirement savings and certain public benefits are generally protected.
You don’t have to worry about your future being at risk. These accounts are safe, allowing
you to focus on getting through the present without losing what you’ve saved for the long
term.
- How Much It Protects
401(k)s, IRAs, and other tax-exempt retirement accounts are fully protected. Social
Security, unemployment benefits, and other public benefits are also off-limits to
creditors.
Let Me Help You Get Back on Your Feet
Filing for Chapter 7 bankruptcy doesn’t mean you’re going to lose everything you’ve worked
so hard for.
However, while these exemptions help protect what’s most important, they don’t solve
everything.
You’re not just facing a pile of debt; you’re facing the uncertainty of what life will look like
on the other side of bankruptcy. That can be scary. I get it. I’ve seen it up close with so many
clients as a bankruptcy attorney serving Raleigh, NC.
But what I can tell you is that bankruptcy is a way to breathe again.
You may still have tough days ahead, but there’s relief on the horizon.
And through it all, I’m here to help. You won’t be doing this alone.
Call Weik Law Office today at 919-845-7721 for a free consultation, and set up a time to
speak with one of our friendly professionals.
The road to a better, more secure future is just one conversation away.