NC Bankruptcy Blog

Protecting College Savings in Bankruptcy

Tax-advantaged college savings plans are a relatively new financial tool, but are used by many families across North Carolina to save for the expense of a college education. If contributions have been made consistently, a 529 plan may have grown to be a substantial asset. For individuals who have come into troubled financial times, the effect bankruptcy may have on these savings can be concerning. Outside of bankruptcy, a desirable feature of a 529 plan is that the contributing parent remains in control of the deposited funds.

10 Reasons Why You Should Disclose Your Assets in Bankruptcy

Part of filing bankruptcy is making a detailed disclosure of assets owned. Here are 10 reasons, in no particular order, why not disclosing an asset to your bankruptcy attorney and in the official schedules is a bad idea.

Don't Give Your Retirement to Your Creditors

Retirement accounts are often a significant asset of individuals and families facing financial hardship following a job loss, major medical expense, divorce, or other occurrence. Tapping a retirement account is an enticing option when faced with not being able to pay bills. This option often only is a short-term fix, and can make things worse if bankruptcy is ultimately filed. Bankruptcy can protect retirement, but cannot un-spend a spent account.

Keeping Social Security Benefits in Bankruptcy

Social Security retirement benefits and disability benefits enjoy broad protection in bankruptcy. The most commonly used protection for benefits is the fact that social security income is excluded by statutory definition from income available to repay creditors. This means it does not count in the means test for chapter 7 eligibility, and is not considered as income used to determine the amount to repay unsecured creditors in a chapter 13 bankruptcy.

New Means Testing Incomes: NC Family Median Incomes Lowest Since 2008

The United States Trustee this month released the updated means testing figures to be used in bankruptcy cases filed on or after 11/1/2011. In North Carolina, the median income levels for households of 2, 3, and 4 people has declined from 3/15/2011 values. This is the third year in a row where these November median income values are lower than the March figure, and median household incomes for 2, 3, and 4 member households have not been at a lower amount since early 2008 in North Carolina.

The previous and new median income figures are as follows:

Protecting Health Equipment: The Health Aides Exemption

This post is part of our uncommon exemptions series, and discusses the Professionally Prescribed Health Aids Exemption under North Carolina law. A concisely worded exemption, NCGS 1C-1601(a)(7) simply provides for exemption of "[p]rofessionally prescribed health aids for the debtor or a dependent of the debtor." This exemption is one that many people do not need, but those who do need it find it to be quite important.

The Uncommon Exemptions - Multipart Series

This week, we begin a series of blog posts discussing the uncommon exemptions in a North Carolina bankruptcy. As a bit of definition, I am going to use the term uncommon fairly generously. There are also what I would call "exotic exemptions" that few would ever encounter. An example of an exotic exemption is that for a Medal of Honor pension under 38 U.S.C. 1562(c). Instead, we target the several property exemptions are used occasionally, but not to the point of ubiquity.

Joint Credit Cards - A Bad Idea

Adding to our recent post about the strength of tenancy by the entirety for owning martial property in North Carolina, I wanted to comment further about voluntary joint debts of spouses. Real estate, such as houses, owned by spouses as a tenancy by the entirety cannot be attached to and sold by a creditor of only one spouse to satisfy unpaid debt of that spouse.


Subscribe to Fabricius & Fabricius Bankruptcy Blog