North Carolina Bankruptcy Filings: Chapter 7, Chapter 13, and Exemptions

To file bankruptcy in North Carolina, you complete a pre-filing credit counseling session, decide between Chapter 7 and Chapter 13 based on the means test, prepare a petition using North Carolina’s state property exemptions, and file it with the federal bankruptcy court for the district where you’ve lived the greater part of the last 180 days. After filing, you attend a meeting of creditors, finish a debtor education course, and receive your discharge. The path is federal, but the exemptions and the local court are North Carolina’s, and both shape the case from the start.

Chapter 7 or Chapter 13

Individuals almost always file one of two chapters. Chapter 7 wipes out qualifying unsecured debt by liquidating property that isn’t protected by an exemption; most consumer cases have no non-exempt property to sell. Chapter 13 reorganizes debt into a three- to five-year repayment plan and lets you keep property while catching up on secured debts like a mortgage arrears.

The choice usually comes down to income and what you own. If your income is low enough and your assets fit inside North Carolina’s exemptions, Chapter 7 is faster and cheaper. If your income is too high for Chapter 7, or you need time to cure a mortgage default, Chapter 13 is the route.

Which North Carolina Bankruptcy Court Hears Your Case

All bankruptcy cases are filed in federal court, which has sole jurisdiction over them.¹ North Carolina is divided into three bankruptcy districts, and you file in the one where you’ve lived for the greater part of the 180 days before your filing date.²

The Eastern District covers the eastern part of the state, including Raleigh, Wilmington, and Fayetteville.
The Middle District covers the central region, including Greensboro, Winston-Salem, and Durham.
The Western District covers the western part of the state, including Charlotte and Asheville.

If you recently moved, the 180-day lookback controls, not your current address.³

The Means Test for Chapter 7 Eligibility

Chapter 7 eligibility runs through the means test. You take your average monthly income over the six months before filing and compare it to the median household income for a North Carolina family of your size. For cases filed between November 1, 2025, and March 31, 2026, the North Carolina medians are:⁴

One earner: $65,396
Two people: $82,221
Three people: $98,932
Four people: $113,744

Add $11,100 for each household member beyond four.⁴ Below the median, you’re presumed eligible. Above it, you subtract allowable expenses, and if disposable income is low enough, you can still qualify. If it’s not, you’ll usually end up in Chapter 13.

North Carolina Property Exemptions

North Carolina has opted out of the federal exemption scheme, so state exemptions govern what you keep in Chapter 7 and shape how much unsecured creditors get in Chapter 13. The main exemptions under N.C. Gen. Stat. 1C-1601:⁵

Homestead: up to $35,000 of equity in your primary residence. For unmarried filers aged 65 or older, this rises to $60,000 when the property was previously co-owned as a tenancy by the entirety or joint tenancy with survivorship and the former co-owner has died.
Wildcard: up to $5,000 of your unused homestead exemption, applied to any property you choose.
Motor vehicle: up to $3,500 of equity in one vehicle.
Household goods and personal property: up to $5,000 for the filer, plus $1,000 per dependent, capped at $4,000 for all dependents combined.
Tools of the trade: up to $2,000 in work-related tools, professional books, or implements.

To use North Carolina’s exemptions, you need to have lived in the state for at least 730 consecutive days before filing. If you moved here more recently, you use the exemptions of the state where you lived for the 180 days before that 730-day window.⁶

Credit Counseling Before You File

Federal law bars you from filing until you’ve completed a credit counseling session with an approved nonprofit agency within the 180 days before your filing date.⁷ The session walks through budgeting and alternatives to bankruptcy. It can be done by phone, online, or in person, but only agencies approved by the U.S. Trustee Program can issue the certificate you file with your petition.⁸ Costs typically run $10 to $50, with reduced fees available for low-income filers.

Documents to Gather

Bankruptcy is a document-heavy process. Before filing, pull together:

All pay stubs (payment advices) received within 60 days before filing.
Your federal tax return for the most recent tax year ending before you file, for the trustee.⁹
Two to three months of bank statements for every account.
A complete list of creditors with addresses and current balances. Leaving one off can prevent that debt from being discharged.
An inventory of everything you own, from real estate to retirement accounts to household goods, with estimated values.

If you own a home and need to establish equity for the homestead exemption, the trustee may want a professional appraisal, which generally runs $250 to $1,400.

Filing the Petition and Paying the Fee

When the forms are complete, you file the petition and schedules with the bankruptcy court in your district. Attorneys file electronically. If you’re representing yourself, check with the local court about whether it accepts in-person or mailed filings.

The total filing fee for Chapter 7 is $338 ($245 case filing fee, $78 administrative fee, $15 trustee surcharge). Chapter 13 totals $313 ($235 case filing fee and $78 administrative fee).¹⁰ Any individual filer can request to pay in up to four installments over 120 days, with the court able to extend to 180 days for good cause. Chapter 7 filers below 150% of the federal poverty guidelines who cannot afford installments can apply for a full fee waiver; that waiver is not available in Chapter 13.¹¹

The Automatic Stay Kicks In

The moment your petition is filed, the automatic stay takes effect. It’s a federal injunction that stops most collection activity: lawsuits, wage garnishments, foreclosure proceedings, and creditor calls all pause.¹²

Some things don’t stop. Criminal proceedings continue. Most family law matters continue, including child custody, paternity, domestic violence proceedings, and the establishment or modification of support. Collection of child support and alimony from non-estate property continues, and the government can still intercept tax refunds for overdue support. Tax audits and notices of deficiency proceed, and government agencies keep their police and regulatory powers.¹²

If you had a case dismissed within the past year, the stay in your new case lasts only 30 days unless the court extends it. With two or more dismissals in the past year, the stay doesn’t take effect at all unless you ask the court to impose it and rebut a presumption of bad faith.

The 341 Meeting of Creditors

A few weeks after filing, you attend the meeting of creditors, called the 341 meeting after the Bankruptcy Code section that requires it. The trustee assigned to your case runs it; a judge does not attend, and creditors rarely do.¹³

You answer questions under oath about your finances, the accuracy of your petition, your assets, income, and expenses. Bring government-issued photo identification and proof of your Social Security number; the trustee must receive these at least 14 days before the meeting.¹³ A straightforward Chapter 7 meeting usually lasts about ten minutes. Chapter 13 meetings can run longer if the trustee has questions about your plan.

Keeping Property You Owe Money On

If you file Chapter 7 and want to keep a car, furniture, or other property that secures a debt, you have two mechanisms.

Reaffirmation

A reaffirmation agreement is a new contract making you personally liable for a debt that would otherwise be discharged. You keep the collateral and keep paying. The agreement must be signed before discharge, and you have 60 days after filing it with the court to rescind.¹⁴ Without an attorney, the court must approve the agreement and find it doesn’t impose an undue hardship. Judges push back hardest on underwater car loans.

Redemption

Redemption lets you keep tangible personal property by paying the creditor the current market value of the item in a single lump sum instead of the full loan balance.¹⁵ Owe $12,000 on a car worth $7,000, and you pay $7,000. Coming up with the lump sum is the hard part; some specialty lenders make redemption loans, generally at high interest.

Debtor Education and Discharge

After the 341 meeting, you have to complete a debtor education course (also called a financial management course) before the court will issue your discharge. This is separate from the pre-filing credit counseling and must come from a U.S. Trustee-approved provider.¹⁶ The certificate is filed with the court.

In Chapter 7, discharge typically arrives 60 to 90 days after the 341 meeting, assuming no objections and a timely education certificate. In Chapter 13, discharge comes after you complete every payment under your confirmed plan, which takes three to five years. Throughout, you’re required to cooperate with the trustee and provide any documents they request.¹⁷

Debts That Survive Discharge

Bankruptcy erases a lot, but not everything. Filing on the assumption that a particular debt will vanish is one of the most common ways people are disappointed by the process. These categories generally survive:¹⁸

Child support and alimony.
Most student loans, unless you file a separate adversary proceeding and prove undue hardship. Many courts apply a demanding three-factor test.
Recent income taxes. Income tax can sometimes be discharged only if the return was due more than three years before filing, was actually filed at least two years before the petition date, and the tax was assessed more than 240 days before filing. Taxes tied to fraud or willful evasion are never dischargeable.
Debts from fraud, false pretenses, embezzlement, larceny, or willful and malicious injury to another person or their property.
Debts for personal injury or death caused while driving under the influence.
Court-ordered fines, penalties, and criminal restitution.
Debts you failed to list, if the creditor didn’t learn about the case in time to file a claim.

Waiting Periods Between Filings

If you’ve been through bankruptcy before, federal law sets minimum waits before you can receive another discharge. These run from the filing date of the prior case:

Chapter 7 after a prior Chapter 7: eight years.¹⁹
Chapter 7 after a prior Chapter 13: six years, unless the earlier Chapter 13 plan paid unsecured creditors in full, or at least 70% and was proposed in good faith as your best effort.¹⁹
Chapter 13 after a prior Chapter 7: four years.
Chapter 13 after a prior Chapter 13: two years.

You can file before these periods run, but you won’t receive a discharge.

The Real Cost of Filing

The court fee is the only mandatory cost, but most people pay more. Attorney fees for a consumer Chapter 7 case typically range from $800 to $5,000, depending on complexity and local market. Chapter 13 attorney fees run higher and are often folded into the plan itself. The two required courses add roughly $20 to $100 combined. A home appraisal, if the trustee wants one, adds $250 to $1,400. If money is the reason you’re filing, ask about the Chapter 7 fee waiver and installment options before you rule out the process.

1
Office of the Law Revision Counsel. 28 U.S. Code 1334 – Bankruptcy Cases and Proceedings
2
Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 1014
3
U.S. Courts. About U.S. Bankruptcy Courts
4
United States Department of Justice. November 1, 2025 Median Income Table
5
North Carolina General Assembly. North Carolina General Statutes 1C-1601 – What Property Is Exempt
6
Office of the Law Revision Counsel. 11 U.S. Code 522 – Exemptions
7
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
8
United States Department of Justice. Credit Counseling and Debtor Education Information
9
Office of the Law Revision Counsel. 11 U.S. Code 521 – Debtor’s Duties
10
U.S. Courts. Bankruptcy Court Miscellaneous Fee Schedule
11
Office of the Law Revision Counsel. 28 USC 1930 – Bankruptcy Fees
12
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
13
United States Department of Justice. Section 341 Meeting of Creditors
14
Office of the Law Revision Counsel. 11 USC 524 – Effect of Discharge
15
Office of the Law Revision Counsel. 11 USC 722 – Redemption
16
U.S. Courts. Credit Counseling and Debtor Education Courses
17
Office of the Law Revision Counsel. 11 U.S. Code 341 – Meetings of Creditors and Equity Security Holders
18
Office of the Law Revision Counsel. 11 U.S.C. 523 – Exceptions to Discharge
19
Office of the Law Revision Counsel. 11 U.S. Code 727 – Discharge