What Property Is Exempt in a Durham Bankruptcy Filing?
Filing for bankruptcy can feel scary, especially if you are worried about losing your home, your car, or other things you rely on. The good news is that the law lets you keep certain property. These are called exemptions, and they are meant to help you keep the basics you need to move forward. A Durham County bankruptcy lawyer can help you understand how this works and what you may be able to keep.
What Does “Exempt Property” Mean?
Exempt property is property that you are allowed to keep when you file for bankruptcy. North Carolina residents filing for bankruptcy generally must use North Carolina’s exemption laws rather than the federal bankruptcy exemptions.
Exemptions are meant to protect basic needs. This includes things like a place to live, a car, clothes, and some personal things. How much you can protect depends on what kind of property you have and your situation.
Why North Carolina Exemptions Matter
People who file for bankruptcy in North Carolina have to follow the state’s exemption laws. These rules say how much value you can keep safe in different kinds of property.
There is a homestead exemption, for instance, that protects some of the value of your home. There are also exemptions for a motor vehicle, household goods, and some types of income or benefits.
State law can change these limits over time, but the same rules for exemptions usually apply in both Chapter 7 and Chapter 13. What changes is how nonexempt property affects the case. That’s why you should think carefully about your situation before filing.
Common Types of Exempt Property in Durham
North Carolina law protects some types of property, but every case is different. These types of property include:
- A part of the equity in your home, which is often protected by the homestead exemption.
- A certain amount of value in your vehicle, which can help you keep your car.
- Household goods like furniture, clothing, and appliances that you use every day.
- Tools you need for your job or trade so you can continue working.
- Retirement accounts and some benefits, like Social Security or disability income, may be protected.
These exemptions help you keep the things you need when you file for bankruptcy.
What Happens to Property That Is Not Exempt
If a property isn’t exempt, it can be sold in a Chapter 7 bankruptcy case to help pay off debts. This is done by a bankruptcy trustee. However, many people who file for bankruptcy do not lose much, if any, property because of how exemptions are applied.
In a Chapter 13 case, you usually do not lose property. Instead, you follow a repayment plan over time. Still, the value of your non-exempt property can affect how much you are required to pay your creditors.
Knowing which property is exempt and which is not is an important part of making your case.
How a Lawyer Can Help You Protect Your Property
A Durham County bankruptcy lawyer can look over your assets and help you use the right exemptions. They can also help you stay away from mistakes that could put your property in danger.
A lawyer can help you list your assets correctly, explain how much equity you have, and make sure you are taking advantage of all the exemptions that are available to you. Sometimes, small mistakes in paperwork or timing can cause problems, so getting help can be very useful.
They can also tell you how different kinds of bankruptcy might affect what you can keep.
Take the Next Step Toward Financial Relief
You don’t have to lose everything if you file for bankruptcy. The law often lets you keep the things that are most important to you while you work toward a new beginning.
If you’re thinking about filing, it might be a good idea to talk to a Durham County bankruptcy lawyer who knows the rules in your area and how they apply to your case. The staff at the Law Office of Stephen E. Robertson, PLLC can help you through the process and keep your property safe. To find out more about your options, call (336) 370-6760 or go online.