North Carolina Bankruptcy Exemptions

• Residence and Burial Plots: A debtor may exempt his or her aggregate interest in real or personal property (mobile home) that he or she uses as a residence, or a burial plot for the debtor or debtor’s dependent not to exceed $35,000 in value. N.C. Gen Stat. Section 1C-1601(a)(1).
• “Wild Card” Exemption: A debtor may exempt his or her interest in any property not to exceed $5,000 in value of any unused exemption amount to which the debtor is entitled under the residence exemption. N.C. Gen Stat. Section 1C-1601(a)(2).
• Motor Vehicle: A debtor can claim an exemption in his or her aggregate interest, not to exceed $3,500, in one motor vehicle. N.C. Gen Stat. Section 1C-1601(a)(3).
• Household Furnishings, Jewelry: A debtor is allowed to exempt his or her aggregate interest, not to exceed $5,000 for the debtor and $1,000 for each dependent (not to exceed four dependents, or $4,000) in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for personal, family or household use of the debtor or a dependent. N.C. Gen Stat. Section 1C-1601(a)(4).
• Tools of the Trade: A debtor may exempt, not to exceed $2,000 in the aggregate, in his or her interest in any implements, professional books or tools of the trade of the debtor or dependent of the debtor. N.C. Gen Stat. Section 1C-1601(a)(5).
• Life Insurance: A debtor may exam his or her life insurance policy as long as the policy is for the sole use and benefit of his or her spouse or children or both. N.C. Gen Stat. Section 1C-1601(a)(6).
• Professionally Prescribed Health Aids: a debtor may apply an exemption to a professionally prescribed health aids without a limitation on value. N.C. Gen Stat. Section 1C-1601(a)(7).
• Compensation for Personal Injury or Wrongful Death: a debtor may exempt compensation for personal injury, including compensation from private disability policies or annuities, or for compensation for the death of a person upon whom the debtor was dependent for support. N.C. Gen Stat. Section 1C-1601(a)(8).
  Unemployment Compensation: N.C. Gen Stat. Section 96-17. 
• Workers Compensation: N.C. Gen Stat. Section 97-21.
  North Carolina Firemen’s and Rescue Squad Workers’ Pension Fund: N.C. Gen Stat. Section 58-86-90
  State and Local Public Servants Under the North Carolina Retirement System: N.C. Gen Stat. Section 128-31.
• Wage Exemption: Earnings of the debtor for his personal services necessary for the use of a family received at any time within 60 days before filing for bankruptcy are exempt. N.C. Gen Stat. Section 1-362. The debtor should be able to trace the funds back to his or her earnings for their labor and the debtor should be able to show that the funds are necessary for his or her support or the support of their family.
• State Employee Retirement Benefits: A debtor’s state retirement rights and benefits are exempt and are not part of the bankruptcy estate. N.C. Gen Stat. Section 135-9. This exemption acts as a trust for state employees.
• Fraternal Benefit Society Benefits: N.C. Gen Stat. Section 58-24-85
  Aid to Blind Persons: N.C. Gen Stat. Section 111-18.
• Group Life Insurance Benefits: N.C. Gen Stat. Section 58-58-165
  Certain Types of Trusts: N.C. Gen Stat. Section 36A-115.
• IRA Accounts: Certain types of retirement plans are exempt as defined in the Internal Revenue Code. This would include individual retirement annuities, SEPs or SEP IRAs, Simple Retirement Accounts and Roth IRAs. N.C. Gen Stat. Section 1C-1601(a)(9). Debtors really should leave the money alone in their retirement account until after they file for bankruptcy since this money is exempt.
• College Savings Plans: The debtor can exempt funds in a college savings plan qualified under Section 529 of the Internal Revenue Code, not to exceed a cumulative limit of $25,000. Special conditions do apply.
• Payments for Alimony, Support, Separate Maintenance and Child Support: The debtor can exempt these payments or expected payments if reasonably necessary for the support of the debtor or any dependent of the debtor.
• Tenants By The Entirety: Real property that is owned by a husband and wife as tenancy by the entireties is exempt from the claims of the individual creditors of the husband or wife. 11 U.S.C. Section 522(d)(3). This means that if one spouse files bankruptcy and the other one does not, then the real property would be exempt from the claims of the filing spouse’s individual creditors. That same property would not be exempt from the claims of joint creditors of both spouses. A divorce that happens within 180 days of the bankruptcy filing will terminate the tenancy by the entirety exemption. 11 U.S.C. Section 541(a)(5).

Value of Exemptions

The value of an exemption is the fair market value of a debtor’s interest in property, less the lien on the property. It is the debtor’s equity in the property.