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Chapter 7 Bankruptcy and Your Property


Have you avoided filing bankruptcy because you’re afraid you’ll lose your home, your automobile, your personal property? You don’t have to be afraid! Bankruptcy laws protect you from becoming homeless, without a car, household goods, your jewelry, or the tools you need to do your job.

When you file a Chapter 7 bankruptcy you are allowed to protect—or, exempt—some or all of your property from being taken away from you. In fact, in lots of cases, bankruptcy exemptions allow you to keep everything you own!

If you’ve lived in North Carolina for at least two years, you can exempt up to $35,000 of the value of your home. What this means is that if you have a home worth $200,000 with a mortgage balance of $165,000, the $18,500 of equity you have in your home is protected! As long as you can keep up with your mortgage payments you can keep your home. Even if you have more than $35,000.00 in equity, you can still protect your property by paying out the value of the non-exempt equity over the course of a Chapter 13 plan. This allows you to discharge your debts AND keep your home.

Similarly, if there is no equity in your car, you will not lose your car! Are you “upside down” on your car loan? Well, as long as you keep making your car payments, you will not lose your car!

But what if you have more than $3,500 equity in your car? What if you have a car worth $4000 that you own outright? Again, in a Chapter 13, you can pay out the difference--$500 in this case—and keep your car!

What else is exempt? Your bankruptcy attorney will help you find all the exemptions you’re entitled to, but here are some of the things you get to keep in a bankruptcy:

  • Your furniture, clothes, appliances, books, and other household goods up to a total value of $5,000 for you and an additional $1,000 for each of your dependents. (Up to $4000 total for your dependents.)
  • Your other property, up to a total value of $3,500.
  • Your professional books and the tools you use for your work or trade, up to $2,000 in total value.
  • Your life insurance plan
  • Your wheelchair, other mobility aids, your hearing aid, and any other medical equipment prescribed by your doctor
  • Your IRA or Roth account
  • Your burial plots

What’s not exempt? Anything you’ve purchased in the 90 days before filing bankruptcy. Keep this in mind as you prepare for your bankruptcy filing. We want you keep what you own! Call the Law Offices of John T. Orcutt at +1-919-646-2654 or visit

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