What are the exemptions available in North Carolina?
North Carolina opted out the federal bankruptcy exemptions for its residents, so the state law exemptions are the exemptions applicable for North Carolina residents in bankruptcy.
NCGS 1C-1601(a) is the primary North Carolina exemption statute. Its paragraphs provide the following particular exemptions (the first four are the most common exemptions claimed):
- The homestead exemption
- The wild card exemption
- The motor vehicle exemption
- The household property exemption
- An exemption for trade tools or books
- Life insurance (a constitutional exemption)
- The health aides exemption
- An exemption for compensation for personal injury or wrongful death.
- An individual retirement account exemption
- An exemption for college savings plans
- State retirement benefits of other states if exempt under that state's laws
- Alimony and child support due to the debtor
Other North Carolina statutes provide further protections for particular property which are useful in bankruptcy. A non-exhaustive list of some of these protections includes:
- State and local government retirement benefits
- Workers compensation
- Unemployment benefits
- Wages that support family earned in the last 60 days
Federal non-bankruptcy law also provides protections that protect other benefits in bankruptcy. While not an exhaustive list, a few of these laws include protections of:
- Social security benefits
- Civil service retirement
- Railroad retirement
- Veterans benefits
Some property is not technically exempt, but is otherwise unavailable for creditors. This includes ERISA-qualified retirement plans (e.g. 401(k) and 403(b) plans), of which the debtor's property interest is such that the plan does not become property of the bankruptcy estate.
Property held by spouses as a tenancy by the entirety is unavailable to pay individual debts. If a bankruptcy debtor has only individual debts, the existence of a tenancy by the entirety may allow a debtor to keep property even if more valuable than the fixed-amount homestead exemption allows.