One big reason people fear filing bankruptcy involves their property – how much will they lose? How much will they be able to keep? Under bankruptcy laws, some property is exempt, which means you get to keep it. In fact, there are 12 types of exempt property you can keep after a North Carolina bankruptcy.
#1. Aggregate interest in a residence
Many people fear losing their home in a bankruptcy. Your attorney can explain this in greater detail based on your individual circumstances. However, generally, debtors can keep up to $30,000 in equity from a residential property as a homestead exemption. In some cases, the exemption rises to $60,000.
#2. Wildcard exemption amount up to $5,000
North Carolina bankruptcy filers may also exempt up to $5,000 on anything of their choice. This can be used as additional exemption for a house, car, jewelry, or a gun collection. In the spring, it is often used to protect tax refunds.
#3. Interest in a motor vehicle
Debtors can also exempt up to $3,500 equity in one motor vehicle. Your attorney can explain how to handle situations where you own more than one vehicle or your vehicle’s value exceeds $3,500.
#4. Household furnishings as exempt property
Most homeowners buy furniture, decorations, and other furnishings to make their homes more comfortable and personal. Under North Carolina bankruptcy laws, you can exempt up to $5,000 for household furnishings like:
Household goods, wearing apparel, appliances, books, animals, crops, musical instruments.
Another $1,000 is allowed for each of the debtor’s dependents.
#5. Professional tools and books
Bankruptcy filers and their dependents can exempt up to $2,000 in aggregate interest in work-related tools, books, and equipment.
#6. Life insurance as exempt property
Debtors should be able to keep life insurance that benefits their children or spouse. Also, there’s an unlimited exemption on employee group life insurance policy or their proceeds.
#7. Professionally prescribed health aids
Some debtors need health equipment like wheelchairs, air conditioning or air cleaning units, and so on. As long as it’s prescribed by a professional, it should be exempt.
#8. Personal injury compensation as exempt property
Some North Carolina bankruptcy filers are also involved in personal injury claims. If so, the compensation they receive should be exempt, but it’s best to discuss this with a bankruptcy attorney.
#9. Individual retirement plans
To qualify for an exemption, the plan should meet IRS requirements for individual retirement plans.
#10. College savings plans
Debtors generally can exempt up to $25,000 accumulated in college savings plans. The exception here is that funds deposited in the previous 12 months may be excluded.
#11. Retirement benefits
Benefits under some retirement plans are exempt. Generally, this is true for plans of other states and governmental units as long as they are exempt under that state or governmental unit laws.
#12. Alimony, support, maintenance, child support as exempt property
Funds like this that are necessary to support the debtor and his or her dependents are usually exempt property.
Call to learn more about exempt property in a North Carolina bankruptcy.
Attorney Leslie Craft has the experience you need to deal with your bankruptcy. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives.
Bankruptcy doesn’t have to be a painful process. To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at email@example.com. My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.