Most of the time, exemptions allow you to protect all of your assets.
Bankruptcy exemptions enable a client to protect property they own while exercising their right to debt relief in a Chapter 7 or Chapter 13 case. In Chapter 7, over 95 percent of filers use exemptions to keep/protect everything they own. In Chapter 13 cases, clients can choose which property they want to keep, and exemptions are used to reduce the amount of their monthly payment.
Valuation is a key ingredient to a successful bankruptcy case.
Most of the time, the value we assign to assets on your bankruptcy petition is the liquidation, not retail, value. So, if you go out and buy a couch at Haverty’s for $2,500, once you get that couch home it is probably only worth a fraction of your cost. For your home, we reduce the value of your property by the costs of sale, usually the 6 % realtor commission. Mortgages, or other liens on property, also reduce the value of your ownership interest.
North Carolina Bankruptcy Exemptions
Money: 2 months of wages necessary for the support of the family (wildcard frequently used for additional money in bank accounts)
Homestead: $35,000 of equity a residence, $70,000 for a married couple
Wildcard: $5,000 in any type of property, $10,000 for a married couple
Household goods: $5000 in household goods, $10,000 for a married couple
Vehicle: $3,500 of equity in a motor vehicle, $7,000 for a married couple
Retirement Accounts, Insurance Policies: Most are 100% exempt
Tools of the Trade: $2,000 for tools used in business, $4,000 for a married couple
Find out how North Carolina exemptions would apply to your situation.
There are more exemptions, and each person’s situation is unique. The bankruptcy code governs which exemptions apply to your petition, whether you are eligible to file a case, and how to exercise your right to use these exemptions during a bankruptcy case. For people in Western North Carolina, I would be pleased to discuss your options during a free bankruptcy consultation either in person or over the phone.
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