Filing Chapter 7 Bankruptcy in North Carolina (2026)
Reviewed by DocDraft Legal Team · North Carolina · Last updated August 18, 2026
Chapter 7 bankruptcy is federal law, but the property you keep is set by North Carolina. North Carolina is an opt-out state: under G.S. 1C-1601(f) you must use North Carolina's exemptions and cannot choose the federal 522(d) list. This page explains North Carolina's $35,000 homestead exemption under G.S. 1C-1601(a)(1), the vehicle and wildcard figures, the means-test median income, and the three federal bankruptcy courts where North Carolinians file. Chapter 7 discharges most unsecured debt but not most student loans, recent taxes, or child and spousal support.
Does North Carolina use state or federal bankruptcy exemptions?
North Carolina is an opt-out state. Under G.S. 1C-1601(f), the federal 11 U.S.C. 522(d) exemptions do not apply to North Carolina residents, so you must use North Carolina's exemptions and cannot elect the federal list. You may instead choose the exemptions in Article X of the North Carolina Constitution, but not the federal set.
Can I keep my house if I file Chapter 7 in North Carolina?
Often yes. Under G.S. 1C-1601(a)(1), North Carolina's homestead exemption protects up to $35,000 of equity in a residence, or up to $60,000 for an unmarried debtor 65 or older whose former co-owner spouse has died. A married couple can each claim the exemption. If your home equity fits within that amount, Chapter 7 generally lets you keep the house.
Can I keep my car if I file Chapter 7 in North Carolina?
Usually yes if your equity is modest. Under G.S. 1C-1601(a)(3), North Carolina exempts up to $3,500 of equity in one motor vehicle. If your car equity is at or below that figure, the vehicle is protected. Any unused homestead can add up to $5,000 of wildcard coverage under G.S. 1C-1601(a)(2) toward higher car equity.
What is the income limit to file Chapter 7 in North Carolina?
For cases filed on or after July 15, 2026, the U.S. Trustee median income figures for North Carolina are $67,117 for one earner, $84,384 for two, $101,535 for three, and $116,737 for four, adding $11,100 per additional person. At or below your household figure, you pass the first part of the means test.
North Carolina's Opt-Out Rule, the $35,000 Homestead, and Where to File
North Carolina is a bankruptcy opt-out state. Under G.S. 1C-1601(f), the federal 11 U.S.C. 522(d) exemptions are not available to North Carolina residents, so a debtor filing here must use North Carolina's exemptions and cannot pick the federal set. The headline protection is the homestead exemption under G.S. 1C-1601(a)(1): up to $35,000 of equity in a residence, rising to $60,000 for an unmarried debtor age 65 or older whose former co-owner spouse has died. North Carolina also exempts up to $3,500 of equity in one motor vehicle under G.S. 1C-1601(a)(3) and provides a wildcard of up to $5,000 drawn from any unused homestead amount under G.S. 1C-1601(a)(2). Household goods are protected up to $5,000 plus $1,000 per dependent under G.S. 1C-1601(a)(4). North Carolinians file in one of three federal bankruptcy courts: the U.S. Bankruptcy Court for the Eastern, Middle, or Western District of North Carolina, based on where they have lived for most of the prior 180 days.
Relevant Laws
North Carolina Homestead and Exemptions Statute (G.S. 1C-1601)
Sets North Carolina's exemptions, including the $35,000 homestead in subsection (a)(1) (up to $60,000 for an unmarried debtor 65 or older whose former co-owner spouse has died), the $5,000 wildcard from unused homestead in (a)(2), and the $3,500 motor vehicle exemption in (a)(3).
North Carolina Opt-Out from Federal Exemptions (G.S. 1C-1601(f))
The opt-out provision. It states that the exemptions in the Bankruptcy Code, 11 U.S.C. 522(d), are not applicable to residents of North Carolina, and that the state's own exemptions apply for purposes of 11 U.S.C. 522(b). Debtors cannot elect the federal list.
North Carolina Motor Vehicle, Household Goods, and Tools Exemptions (G.S. 1C-1601(a))
Subsection (a)(3) exempts up to $3,500 in one motor vehicle, (a)(4) exempts up to $5,000 in household goods plus $1,000 per dependent up to $4,000 more, and (a)(5) exempts up to $2,000 in tools of the trade and professional books.
Federal Bankruptcy Code Exemptions and Means Test (11 U.S.C. 522, 707)
The federal law behind Chapter 7. Section 522(b)(2) lets a state opt out of the federal 522(d) exemptions, which North Carolina has done, and section 707(b) sets the means test measured against state median income.
Regional Variances
North Carolina Chapter 7 Exemption Table
Homestead
G.S. 1C-1601(a)(1): up to $35,000 of equity in real or personal property used as a residence, in a co-op, or in a burial plot. Up to $60,000 for an unmarried debtor age 65 or older whose former co-owner spouse has died. A married couple can each claim the exemption.
Motor vehicle
G.S. 1C-1601(a)(3): up to $3,500 of equity in one motor vehicle. Equity above the figure may be reachable by the trustee, though up to $5,000 of unused homestead wildcard under (a)(2) can be applied to close the gap.
Wildcard
G.S. 1C-1601(a)(2): up to $5,000 in any property, drawn only from the portion of the $35,000 homestead you do not use. Renters and low-equity homeowners can apply this to cash, a vehicle, or other assets not otherwise covered.
Personal property
G.S. 1C-1601(a)(4): up to $5,000 in household furnishings, goods, apparel, appliances, books, animals, crops, and musical instruments, plus $1,000 for each dependent up to $4,000 more. G.S. 1C-1601(a)(5): up to $2,000 in tools of the trade and professional books.
Wages
G.S. 1-362: earnings from personal services rendered within 60 days before filing are exempt when needed for the support of the debtor's family. This protects recent take-home pay from being swept into the bankruptcy estate.
Retirement
G.S. 1C-1601(a)(9): individual retirement accounts and other retirement benefits are exempt. ERISA-qualified plans such as 401(k)s are separately excluded from the bankruptcy estate under federal law, so most tax-qualified retirement savings is protected.
Suggested Compliance Checklist
Confirm the current North Carolina means-test median income
Before you file days after startingCheck your household size against the U.S. Trustee North Carolina median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $67,117 for one, $84,384 for two, $101,535 for three, and $116,737 for four, adding $11,100 per additional person.
Complete the pre-filing credit counseling course
Within 180 days before filing days after startingTake an approved credit counseling course from a provider authorized for your North Carolina district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed.
Value your assets and apply the North Carolina exemptions
Before preparing your schedules days after startingValue your home, vehicle, and personal property, then match them to the G.S. 1C-1601 exemptions: the $35,000 homestead, the $3,500 vehicle exemption, the $5,000-plus household goods figure, and any unused homestead as up to $5,000 of wildcard. North Carolina is opt-out, so the federal 522(d) list is unavailable.
Prepare and file your petition and schedules
Filing day days after startingFile your petition, schedules, and exemption claims in the correct court: the Eastern, Middle, or Western District of North Carolina, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment.
Attend the 341 meeting and finish the debtor education course
Before discharge days after startingAttend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm the current North Carolina means-test median income | Check your household size against the U.S. Trustee North Carolina median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $67,117 for one, $84,384 for two, $101,535 for three, and $116,737 for four, adding $11,100 per additional person. | - | Before you file |
| Complete the pre-filing credit counseling course | Take an approved credit counseling course from a provider authorized for your North Carolina district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed. | - | Within 180 days before filing |
| Value your assets and apply the North Carolina exemptions | Value your home, vehicle, and personal property, then match them to the G.S. 1C-1601 exemptions: the $35,000 homestead, the $3,500 vehicle exemption, the $5,000-plus household goods figure, and any unused homestead as up to $5,000 of wildcard. North Carolina is opt-out, so the federal 522(d) list is unavailable. | - | Before preparing your schedules |
| Prepare and file your petition and schedules | File your petition, schedules, and exemption claims in the correct court: the Eastern, Middle, or Western District of North Carolina, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment. | - | Filing day |
| Attend the 341 meeting and finish the debtor education course | Attend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions. | - | Before discharge |
Frequently Asked Questions
Under G.S. 1C-1601(a)(1), North Carolina protects up to $35,000 of equity in real or personal property used as a residence, in a co-op, or in a burial plot. The figure rises to $60,000 for an unmarried debtor age 65 or older whose former co-owner spouse has died. A married couple filing together can each claim the exemption.
Under G.S. 1C-1601(a)(4), North Carolina exempts up to $5,000 in household furnishings, goods, apparel, appliances, books, and similar items, plus $1,000 for each dependent up to $4,000 more. G.S. 1C-1601(a)(5) exempts up to $2,000 in tools of the trade, and (a)(3) exempts up to $3,500 in one motor vehicle.
You file in the federal bankruptcy court for your area: the U.S. Bankruptcy Court for the Eastern, Middle, or Western District of North Carolina. You file where you have lived for most of the prior 180 days. Each district has its own local rules and approved credit counseling and debtor education providers.
No. Chapter 7 discharges most unsecured debt like credit cards and medical bills, but it does not erase most student loans, recent income taxes, child support, or spousal support, and it will not discharge debts from fraud. Secured debts like a car loan remain unless you surrender the collateral or reaffirm the loan.
Yes, in large part. Under G.S. 1-362, earnings for personal services within 60 days before filing are exempt if needed to support the debtor's family. Under G.S. 1C-1601(a)(9), individual retirement accounts and similar retirement plans are exempt, and ERISA-qualified plans are separately excluded from the bankruptcy estate under federal law.
Other North Carolina guides
Asset Protection Planning in North Carolina (2026)
Dealing With Debt Collectors in North Carolina (2026)
How to Break a Lease in North Carolina Legally (2026)
How to Dispute a Bill in North Carolina (2026)
How to File a Small Claims Lawsuit in North Carolina (2026)
How to File for Divorce in North Carolina (2026)
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