Chapter 7 Bankruptcy North Carolina: 3 Things You Need to Know

A tough financial predicament can leave you feeling lost without the correct information. We've compiled this article to assist those in similar situations. If you're contemplating Chapter 7 bankruptcy, particularly in North Carolina, here are a few crucial points to consider:
Information in this article does not constitute legal advice, it is for informational purposes only, and may not constitute the most up-to-date information. Readers should contact their attorney for advice on any particular legal matter.
  • Firstly, do you meet the requirements for Chapter 7 bankruptcy, and what are the filing costs in North Carolina?
  • Secondly, are there alternative options that may better suit your situation?
  • Lastly, it's essential to understand specific details about Chapter 7 bankruptcy in North Carolina.

We'll delve into these aspects below to ensure you have all the necessary information to make an informed choice. If you prefer a more visual approach, you can utilize the North Carolina Chapter 7 Calculator below to estimate your qualifications and costs.

1) How Chapter 7 Bankruptcy Works in North Carolina

How Fast Do You Get Relief in A Chapter 7 Bankruptcy in North Carolina

A typical no-asset Chapter 7 case in the state typically concludes within about 120 days from start to finish. In this context, "no-asset" bankruptcy implies that you lack high-value assets exceeding North Carolina's bankruptcy exemptions. Hence, you might experience a relatively swift resolution to your bankruptcy case if you're not burdened with substantial assets.

How Much Does It Cost To File Chapter 7 Bankruptcy in North Carolina?

Chapter 7 bankruptcy typically costs $500 to $3000, depending on your location, such as the state or city. For instance, filing in Raleigh might cost around $1,125, while in Greensboro, it could rise to $1,500.

Moreover, there are instances where you can lower the filing cost, such as by utilizing a filing fee waiver. To explore further, refer to the North Carolina filing fee waiver for comprehensive information on potential cost reductions.

How Do I Qualify For Chapter 7 Bankruptcy in North Carolina?

When assessing your eligibility for Chapter 7, it's crucial to examine the Chapter 7 Bankruptcy North Carolina Income Limits. This evaluation determines whether you qualify for a bankruptcy discharge, meaning your debts will be forgiven. If you pass the means test, which you can estimate below, Chapter 7 will encompass most of your unsecured debts. Unsecured debts, such as medical bills, personal loans, certain old income tax debts, old utility bills, credit card debts, and most personal judgments, do not have any collateral.

What about secured debts in Chapter 7?

If you aim to eliminate secured debts like car loans and mortgages, Chapter 7 bankruptcy might still be a viable option. However, the trade-off is that you must surrender the asset to the creditor, who will view it as full payment for your outstanding debt.

IMPORTANT: Chapter 7 Qualification via North Carolina Means Test

You can use the Bankruptcy Means Test to assess your eligibility for Chapter 7 bankruptcy in North Carolina. This form calculates your average annual income using your gross income from the last six months and compares it to the median income of households in North Carolina. If your income falls below the North Carolina median income, you may qualify for a Chapter 7 bankruptcy discharge.

Feel free to utilize the calculator provided below:

Help! My Income Exceeded The Chapter 7 Means Test Allowable in North Carolina

If your income is higher than the median income in your state, you might need to dive into part 2 of the means test or explore an alternative option. We encourage you to check out this helpful resource: passing the Chapter 7 means test when income exceeds the median.

Chapter 7 Bankruptcy North Carolina Income Limits

Here are the income limitations based on household size for bankruptcy filings in North Carolina on or after November 1, 2023:

# of PeopleAnnual Income
  • For households with more than nine members, an additional $9,000 is added per extra family member.

Will I lose my belongings if I file Chapter 7 bankruptcy?

Let's talk about bankruptcy exemptions and how they can safeguard your property in a bankruptcy case. These exemptions are like protective shields for the equity in your assets. However, if your property isn't covered by these exemptions, it may end up being sold in a Chapter 7 liquidation case.

Now, when it comes to Chapter 13 cases, things get a bit trickier. If there's any non-exempt equity in your property, it can amp up your bankruptcy plan payment. So, it's crucial to understand how these exemptions work.

For most people, their home is their most prized possession. There's something called the North Carolina bankruptcy homestead exemption that can help protect it. Let's break it down:

  • If you're single and under 65, you can get an exemption of $35,000.
  • If you're single and 65 or older, the exemption jumps up to $60,000.
  • Now, if you're married and under 65, you can claim an exemption of $70,000.
  • Lastly, if you're married and 65 or older, the exemption skyrockets to $120,000.

Let's take a look at the specific North Carolina homestead bankruptcy exemption text.

"N.C. Gen. Stat. § 1C-1601(a)(1). Real or personal property, including co-op, used as a residence, can be exempted up to $35,000 ($60,000 if you're 65 or older and your spouse is deceased). Plus, you can apply up to $5,000 of any unused portion of the homestead exemption to other property." (Source)

Remember, it's crucial to explore all the available North Carolina bankruptcy exemptions and pick the ones that best protect your assets.

Now, if you're curious about the federal bankruptcy exemptions, they're all laid out in the 11 U.S. Code §522. However, here's a pro tip: North Carolina doesn't allow you to use these federal exemptions, so keep that in mind.

Always make sure you're working with the most up-to-date information when it comes to bankruptcy exemptions.

Understand North Carolina Bankruptcy Exemptions

In North Carolina, your bankruptcy exemptions largely depend on age and marital status. For many, their home is the main asset they want to protect, so we'll break down what that bankruptcy shield looks like below.

  • Single and under 65 - $35,000
  • Single and over 65 - $60,000
  • Married and under 65 - $70,000
  • Married and over 65 - $120,000

Aside from your home, you can apply up to $5,000 of any unused portion of your homestead exemption to any other property you have. In general, make sure to double-check that you've got the most up-to-date information when it comes to these bankruptcy exemptions.

Chapter 7 Bankruptcy North Carolina Pros and Cons


  1. Speedy discharge: Within 120 days, you could achieve a debt-free status and embark on a fresh financial journey.
  2. Property protection: Meeting the exemption criteria under Chapter 7 may enable you to retain a significant portion of your belongings.
  3. Halt to debt collection lawsuits: Filing triggers an automatic stay from the court, halting legal actions against you, including harassing calls and letters from debt collectors.
  4. Relief from loan deficiencies: If you find yourself owing more on a loan than the collateral's value, bankruptcy could alleviate this financial burden.


  1. Income requirements: Meeting specific income criteria is necessary to qualify for Chapter 7 bankruptcy.
  2. Potential loss of assets: If your assets exceed the exemption limit, you may need to part with some of your property.
  3. Impact on credit report: Filing for Chapter 7 bankruptcy can have a long-term effect on your credit report, staying on record for up to a decade and making it difficult to obtain future loans or favorable interest rates.
  4. Non-dischargeable debt: Not all debts are eligible for discharge through Chapter 7 bankruptcy. Specific obligations, like student loans and child support payments, typically cannot be discharged.

2) Alternatives to Chapter 7 Bankruptcy in North Carolina

a) Chapter 13 Bankruptcy in North Carolina

If your income exceeds the limit for Chapter 7 bankruptcy, then it may be good to consider Chapter 13 over Chapter 7 bankruptcy. In North Carolina, Chapter 13 allows you to reorganize your debts into a manageable monthly plan. This restructuring can aid in retaining your home and vehicles, halting foreclosure proceedings, and preventing repossession of your possessions. Additionally, it may enable you to reduce outstanding payments for child support, alimony, and car loans.

Can you afford Chapter 13 bankruptcy?

If you're contemplating Chapter 13 bankruptcy, you can utilize this calculator to estimate whether you can afford the monthly payments.

b) Debt Settlement/Relief

Another alternative to Chapter 7 and Chapter 13 bankruptcy is debt settlement. With this option, a debt settlement company negotiates a reduced amount on your total debt, providing potential savings over time. However, it's essential to weigh its impact on your credit score and conduct thorough research to select a reputable, transparent debt settlement company.

c) Debt Management

Another avenue to consider is debt management. Unlike debt settlement, which focuses on reducing the total debt amount, debt management aims to lower interest rates. Typically spanning 3 to 5 years, these programs may be slightly more expensive than debt settlement. Additionally, not all creditors may cooperate with debt management companies.

Nevertheless, debt management could slash interest rates by approximately 10-20% if you're grappling with substantial high-interest credit card debt. Over time, this reduction could lead to significant savings of 30-50% on your current debt, enabling more efficient repayment. Assessing your financial situation and determining the most suitable option is crucial.

d) Debt Payoff Planning

Another alternative worth considering is debt payoff planning. While this strategy demands effort and necessitates cutting expenses and saving excess income to chip away at debt, it offers tangible progress each month by selecting a suitable debt payoff plan. Moreover, as you start clearing debts, you can channel those payments toward remaining debts, accelerating the payoff process exponentially.

3) Specific North Carolina Chapter 7 Bankruptcy Information:

North Carolina Chapter 7 Bankruptcy Credit Counseling and Debtor Education Courses

During the Chapter 7 bankruptcy filing process, you must complete a couple of courses to obtain a bankruptcy discharge. These courses aim to enhance your understanding of your financial situation and explore alternatives to bankruptcy. Following the initial filing, another course, the debtor education course, is mandatory. This course equips you with the tools and knowledge to manage your finances better.

The United States Trustee's Office has sanctioned specific companies in North Carolina to provide these bankruptcy courses. You can access a list of these approved companies on the UST website.

North Carolina Chapter 7 Bankruptcy Court Locations

Remembering the 341 meeting(s) of creditors when navigating the bankruptcy process is essential. Amid the pandemic, many of these meetings have transitioned to phone or Zoom sessions. However, it's crucial to know the location of the nearest courthouse in case an in-person appearance is required. To assist with this, we'll furnish a list of court locations based on the bankruptcy districts in North Carolina.

Eastern District

  • Clerk of Court, P.O. Box 25670 Raleigh, NC 27611


  • 324 W Market St, Greensboro, NC 27401
  • 601 W 4th St, Winston-Salem, NC 27101
  • 3518 Westgate Dr., Suite 400, Durham, NC 27707


  • 401 West Trade Street, Room 210, Charlotte, NC 28202
  • 100 Otis Street, Room 309, Asheville, NC 28801
  • 200 West Broad Street, Room 304, Statesville, NC 28677

Chapter 7 Bankruptcy Trustees North Carolina

The United States Trustee Program doesn't currently handle bankruptcy estates in North Carolina, so if you have any questions about cases in the state, you can reach out to the Administrative Office of the U.S. Courts.

Call them at (202) 502-1900 or message them at the address below: The Administrative Office of the U.S. Courts Bankruptcy Judges Division 1 Columbia Circle, N.E., Suite 4-250 Washington, DC 20544.


After learning about Chapter 7 bankruptcy in North Carolina, you're likely more informed about its requirements and potential alternatives. If you're curious about your eligibility and potential costs, consider using the Chapter 7 bankruptcy means test calculator below for a quick estimate.

To delve deeper into the Chapter 7 bankruptcy filing process, explore our comprehensive guide outlining what to expect. Additionally, if you're interested in minimizing attorney fees and are open to handling some tasks independently, our article on filing bankruptcy without an attorney could be valuable. You can access it here: filing bankruptcy without an attorney.

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