Can I Keep My House Or Car?
Valuable assets, like a home or vehicle, are important to most of us. Many people who are seeking solutions to financial burdens often worry about losing their house or car if they file bankruptcy.
In general, individuals are able to keep both, as bankruptcy allows debtors to exempt certain assets from their bankruptcy. However, the type of bankruptcy filed and specific circumstances will dictate the official outcome.
Keeping Your House After Filing Bankruptcy
For those who wish to erase their debts by filing a Chapter 7 bankruptcy, the law in North Carolina allows individuals to keep their home (and continue making mortgage payments) if the equity in their home does NOT exceed the allowable equity exemption of $35,000, or $70,000 for a married couple. If the equity of a homestead exceeds this amount, the bankruptcy trustee may require the home to be sold with the proceeds going to satisfy the consumer’s outstanding debts.
Individuals may also qualify for the tenants by the entirety exemption if the husband and wife hold their real estate jointly. Further, those ages 65 and older may qualify for a widow’s exemption to protect a primary residence. Let us determine if you qualify for these important exemptions.
Under a Chapter 13 bankruptcy, an individual sets up a three- to five-year monthly payment plan to pay off a portion of the outstanding debts. In most cases, a debtor will continue making monthly mortgage payments during this period and stay in their home. If an individual is behind on their mortgage payments, the past due arrearages and mortgage payments will generally be included in the monthly payment plan arrangement to protect the home from foreclosure.
Keeping Your Car After Filing Bankruptcy
For Chapter 7 bankruptcy filers in North Carolina, individuals are allowed to exempt up to $3,500 of the equity in a vehicle. Filers can generally opt to continue making payments with the lender and avoid repossession. If the equity significantly exceeds the exemption amount, a Chapter 13 bankruptcy may be best to protect the vehicle.
For Chapter 13 filers, individuals who are past due on car loan payments can include the amounts in their three- to five-year payment plan, and oftentimes can lower the car payment.
The Wild-Card Exemption
The state of North Carolina also offers filers a wild card exemption. This means that filers can exempt $5,000 in property, such as a boat, camper etc., that will not be included in their bankruptcy assets.
Guidance For Your Specific Circumstance
Obtaining the guidance from one of our experienced bankruptcy attorneys who can offer advice for your particular situation is advised. There could be specific exemptions, limitations or alternate options available. There is also an exemption for married couples who own real estate as tenants by the entirety.
Serving all of southeast North Carolina with offices in New Bern, Wilmington, Greenville and Jacksonville.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.