Filing for Bankruptcy in North Carolina (NC)

A North Carolina‑specific guide to exemptions, eligibility, costs, and Chapter 7 and Chapter 13 bankruptcy filing steps.

By , Attorney University of the Pacific McGeorge School of Law
Updated 10/31/2025

North Carolina bankruptcy exemptions let you keep essential property when you file Chapter 7 or Chapter 13, including homestead, vehicle, and a wildcard, subject to North Carolina's rules. This guide explains North Carolina bankruptcy exemptions, filing for bankruptcy in North Carolina, and when Chapter 7 vs. Chapter 13 makes sense.

You'll learn what property is protected, how the means test affects eligibility, and what paperwork and deadlines to expect in North Carolina courts. If you're weighing debt relief options, use this overview to decide whether to file, what you can keep, and how to prepare the right forms.

What Are North Carolina Bankruptcy Laws and Who Qualifies?

If you're struggling financially and aren't sure what to do, filing for bankruptcy in North Carolina can provide a structured, lawful way to rebuild your finances. Economic changes are making it increasingly difficult for American families to weather job losses, illnesses, and other emergencies, leading to a rise in bankruptcy filings nationwide.

How to File Bankruptcy in North Carolina: Chapter 7 vs. 13

These are the key factors to help you decide whether to file for Chapter 7 or Chapter 13 in North Carolina.

Chapter 7 "Liquidation" Bankruptcy

 Chapter 13 "Repayment Plan" Bankruptcy Citations

Duration to Discharge

 three to six months three to five years 11 U.S.C. § 727(a); § 1322(d)

Filing Fee

 $338 (subject to change) $313 (subject to change) 28 U.S.C. § 1930; as of October 2025 (subject to change)

Potential Property Loss

 Yes. Nonexempt assets are sold for creditors. No. Filers pay the value of nonexempt assets through the plan and keep the property. 11 U.S.C. § 541, § 726, § 1322(b)(2)

Means Test Required

Yes. Income can't exceed limits; filers must not have disposable income to repay debts.

 No. However, filers must earn enough to pay the required Chapter 13 plan amount. 11 U.S.C. § 707(b); § 1325(b)

Debt Limits

 None Unsecured $526,700; secured $1,580,125

11 U.S.C. § 109(e); April 1, 2025 - March 31, 2028

Best For

 Lower income, limited assets.

Regular income, want to avoid property loss.

 11 U.S.C. § 101(10A); § 109(e)

Biggest Benefits

 Erases most debts quickly without requiring repayment.

Saves homes and cars by catching up on payments over time; can pay to keep property that would be lost in Chapter 7; can repay nondischargeable debts over time.

 11 U.S.C. § 362 (automatic stay)

Main Downsides

 Property not covered by exemptions is lost.

The repayment plan requires payment of all disposable income to creditors for years, with court oversight. Payment isn't always affordable.

 11 U.S.C. § 727(a); § 1307

Mortgage and Car Payments

 No catch-up for missed payments, risk of property loss to the lender. Can catch up on missed payments in the plan and keep a house, car, or other property serving as collateral. 11 U.S.C. § 1322(b)(5)

Nondischargeable Debts

Debts that aren't eliminated include child support, many taxes, and student loans. Debt will remain after bankruptcy.

 Nondischargeable debts are repaid in the plan. 11 U.S.C. § 523(a)

Previous Chapter 7 Filings

 Eight years after prior Ch. 7; six after Ch. 13

Four years after Ch. 7; two years after Ch. 13

 11 U.S.C. § 727(a)(8); § 1328(f)

Chapter 7 Bankruptcy North Carolina: Fast Debt Relief

If your primary goal is to erase debt fast, Chapter 7 bankruptcy is the best option. It eliminates unsecured debts, such as credit cards and medical bills, typically within a few months. However, you could lose property exceeding North Carolina's exemption limits because the Chapter 7 trustee can sell that property to repay creditors.

Who Qualifies for Chapter 7 Bankruptcy in North Carolina

The steps you'll need to take will depend on whether your income falls below or above your state's median income. The U.S. Trustee Program "Means Testing" page has current amounts.

Income Below Median

If your gross yearly family income is below North Carolina's median income for your family size, you qualify. For a filing between November 1, 2025, and May 14, 2026, you would be eligible at or below the following limits:

  • $65,396 for a one-person household
  • $82,221 for a two-person household
  • $98,932 for a three-person household, and
  • $113,744 for a four-person household.

Income Above Median

If your gross family income is higher than the median, an additional "means test" calculation is necessary to determine your eligibility. This test lets you subtract expenses from your income and determines whether you have anything left to pay creditors.

Take the bankruptcy eligibility quiz. Find out about particular issues and whether you qualify by taking the Chapter 7 bankruptcy quiz.

Chapter 13 Bankruptcy in North Carolina: Repayment Plans to Keep Your Home

Chapter 13 creates a repayment plan lasting three to five years. Most people pay a minimal amount toward debts they can discharge (erase).

Chapter 13 vs. Chapter 7 Bankruptcy in North Carolina

Chapter 13 can help prevent foreclosure or repossession, allowing filers to keep assets like homes and cars while catching up on missed mortgage or vehicle payments. Because Chapter 7 doesn't have a repayment plan, most people lose their home or car if they file when they're behind.

Chapter 13 Income Requirements and Eligibility in North Carolina

A fundamental requirement for Chapter 13 is having a regular income source to fund your repayment plan. Also, your total debt must fall within specific limits, which are updated periodically (check the chart above for current amounts).

Try the payment calculator. Estimate your Chapter 13 repayment plan in minutes using the Chapter 13 payment calculator.

North Carolina Bankruptcy Exemptions: What You Can Keep

You keep assets protected by specific bankruptcy exemptions. In Chapter 7, nonexempt property is sold for the creditors. In Chapter 13, you can keep nonexempt property by paying its value in your repayment plan. The federal bankruptcy exemptions aren't allowed in North Carolina, so you must use the state exemptions. However, you can use the federal nonbankruptcy exemptions.

North Carolina State Exemptions Table

Exemption Category

 North Carolina Exemptions

Homestead or Residential Property
  • Homestead exemption of $35,000 in a residence consisting of real or personal property, including a cooperative, or $18,500 in a burial plot.
  • An unmarried debtor 65 or older can exempt $60,000 if the property was previously owned as tenants by the entireties or as joint tenants with right of survivorship, and the former co-owner is deceased. (N.C. Gen. Stat. §§ 1C-1601(a)(1),(e).)
Motor Vehicles
  • $3,500 in one motor vehicle. (N.C. Gen. Stat. § 1C-1601(a)(3).)
Personal Property and Wildcard
  • $5,000 in any property without restriction, reduced by any amount utilized for the homestead exemption. (N.C. Gen. Stat. §§ 1C-1601(a), (e).)
  • $1,000 per dependent up to $4,000 in household goods and furnishings, wearing apparel, appliances, books, animals, crops, or musical instruments held for household use.
  • Health aids without regard to value.
  • Subject to purchase money liens and to tax and support claims. (N.C. Gen. Stat. § 1C-1601(e).)
Trade Implements
  • $2,000 in trade implements of the debtor or a dependent. (N.C. Gen. Stat. § 1C-1601(a)(5).)
Alimony, Support, Separate Maintenance
  • N/A
Claims for Negligence or Tortious Conduct
  • Compensation for personal injury, or for the death of a person on whom the debtor was dependent, is exempt except for claims for expenses relating to the injury giving rise to the compensation and for child support obligations. (N.C. Gen. Stat. § 1C-1601(a)(8).)

Crime Victims' Compensation
  • Exempt except as to expenses resulting from the injury.
  • The work loss portion of the award is subject to support obligations. (N.C. Gen. Stat. § 15B-17.)

Fraternal Benefit Society Benefits

Insurance Benefits
  • Life insurance on a husband for the benefit of his wife and children is exempt from the debts of the insured. (N.C. Const. art. X, § 5.)
  • Compensation for wrongful death of a person on whom the debtor depended or for personal injuries is exempt, except for claims related to the injury. (N.C. Gen. Stat. §§ 1C-1601(a)(6), (8); § 58-58-165 and provisions listed thereafter).
  • A job-sponsored group insurance policy is exempt before and after payment, except for proceeds payable to the estate of the insured employee. (N.C. Gen. Stat. § 58-58-165.)

Pensions & Retirement Benefits
  • Various public employees' pensions and retirement benefits are exempt. (N.C. Gen. Stat. § 135-9 and provisions listed thereafter.)
  • Tax-exempt and qualified retirement plans—federal cap for IRAs is $1,711,975. (11 U.S.C. §§ 522(d)(10)(E),(12), (n).)

Public Assistance
  • Payments under an aid to the blind award. (N.C. Gen. Stat. § 111-18.)
  • Unemployment compensation is exempt before and after receipt if not commingled (subject to debts for necessaries furnished during unemployment and certain child support claims). (N.C. Gen. Stat. § 96-17.)
  • Workers compensation benefits are exempt. (N.C. Gen. Stat. § 97-21.)

Wages

Partnership Property
  • Partner's interest in specific partnership property is exempt from claims of individual creditors (N.C. Gen. Stat. § 59-55.)

Tenancies by the Entirety
  • Such an interest might be exempt, but multiple exceptions apply, so consult a bankruptcy lawyer. (Grabenhofer v. Garrett, 260 N.C. 118, 131 S.E.2d 765 (1963); In the Matter of Woolard, 13 B.R. 105 (Bankr. E.D.N.C. 1981).)

Step-by-Step: How to File for Bankruptcy in North Carolina

When you first file, both the Chapter 13 and Chapter 7 processes are similar.

Step 1. Complete Credit Counseling

Complete a U.S. Trustee-approved credit counseling course within 180 days before filing. Also, make sure you are prepared to file for bankruptcy by securing housing, transportation, and a bank account in good standing.

Step 2. Assemble Financial Documents

Gather all financial documents you'll need to complete and file the bankruptcy forms, including pay stubs, tax returns, bank statements, and debt lists (we've highlighted what you'll need below).

Step 3. File in the Correct North Carolina District

File your forms in the proper federal bankruptcy court, which will depend on where you live. North Carolina has three districts:

You'll find instructions for filing your paperwork, local rules, and more. Fees can be waived or paid in installments. Once you file, the automatic stay will go into effect. Almost all collection efforts, lawsuits, garnishments, and foreclosures stop when you file.

Step 4. Attend the 341 Meeting of Creditors

Attend this mandatory court-supervised session. After the 341 meeting, all filers complete the second required U.S. Trustee-approved course, debtor education. Chapter 13 filers must also attend a plan confirmation (approval) hearing and complete the repayment plan.

Step 5. Receive the Discharge

After fulfilling requirements, the court issues a discharge order that erases eligible debts.

Step 6. After Filing for Bankruptcy in North Carolina

After discharge, you'll want to maintain financial stability by reviewing your credit report and rebuilding credit. Maintaining emergency savings is another good way to avoid another bankruptcy.

Learn more details about bankruptcy and whether it's better to file for Chapter 7 or 13.

North Carolina Bankruptcy FAQs 2025

Can I keep my car if I file for bankruptcy in North Carolina?

You can keep a vehicle if your equity is within the exemption limit. If it's financed, you must be and stay current on payments in Chapter 7. You can catch up on missed payments and keep your car in Chapter 13.

Will I lose my house in bankruptcy in North Carolina?

As long as your home equity is exempt and you stay current on payments, you should be able to keep your house in Chapter 7. If you're behind on payments, Chapter 13 allows you to catch up and keep your home. Learn which chapter to file to keep your house.

Can I file bankruptcy again if I've filed before?

Yes, but bankruptcy waiting periods apply. You must wait eight years between Chapter 7 filings. The time is reduced to six years if you choose to file for Chapter 13 after filing for Chapter 7.

How much does bankruptcy cost?

You'll pay filing fees, counseling and debtor education course fees, as well as attorney costs, which vary according to the bankruptcy chapter and case complexity. A Chapter 7 case typically costs between $1,800 and $3,500. You'll likely pay $3,500 to $5,000 for Chapter 13. Chapter 7 costs must be paid in full before filing. However, legal fees can be included in the Chapter 13 plan.

How long does bankruptcy stay on my credit report?

Chapter 7 remains on your credit report for up to 10 years. Chapter 13 stays on your credit report for seven years. However, the impact diminishes over time, and many people see credit improvement within a year or two.

How long does Chapter 7 take in North Carolina?

Chapter 7 typically takes three to five months to complete. While you'll receive your discharge within that time, the case could remain open longer if the trustee needs to sell property or resolve litigation.

Can I file bankruptcy without a lawyer in North Carolina?

Many people can file for bankruptcy without a lawyer if they're willing to do the proper research. Simple Chapter 7 cases tend to be the most successful—those with dischargeable debts and minimal assets. Bankruptcy courts advise against filing a Chapter 13 without a lawyer because Chapter 13 cases are complicated and rarely successful without a lawyer's help.

What debts can't be discharged in a North Carolina bankruptcy

You won't be able to eliminate support obligations and most taxes. Student loans can be eliminated, but you must file a bankruptcy lawsuit and prove that paying the loans would be an "undue hardship." Learn more about nondischargeable debts in bankruptcy.

Did you know Nolo has made the law accessible for over fifty years? It's true, and we wholeheartedly encourage research and learning. However, online articles and resources can't address all bankruptcy issues and aren't written with the facts of your particular case in mind. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

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