What Assets Can I Keep if I File for Chapter 7 Bankruptcy in Raleigh, NC?

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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.

    The road to a better, more secure future is just one conversation away.

    Use our online contact form, or call us at 919-845-7877 for more information, or for a FREE consultation