Bankruptcy Rules in North Carolina
In general, the bankruptcy rules in North Carolina resemble the rules in other states. But each state has at least one bankruptcy district with its own rules on filing, fees and other practical concerns. Each state also control over the exemptions a debtor can claim to protect property from liquidation by the court appointed trustee. Of course, liquidation is only a primary concern under Chapter 7 bankruptcy, eligibility for which is determined by median income within the state. In these ways, the bankruptcy rules in North Carolina are unique.
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Local Rules
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Each bankruptcy district in the U.S. has its own local rules. North Carolina has three bankruptcy districts, which means three sets of local rules. These rules dictate everything from the format of case filings to the manner in which filing fees are paid, but there are some similarities and overlapping in the local rules. For example, in all three North Carolina districts, the filing fee for Chapter 7 is $299, consisting of a $245 case origination fee, a $39 administrative fee, and a $15 trustee surcharge. The total filing fee for Chapter 13 is $274. All three divisions allow payment in installments, but only the Eastern District explicitly says a petitioner has 10 days to pay if the installment request is denied. In the Middle District, the local rules simply state that a discharge will not be granted until fees are paid in full.
Districts
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The district local rules also dictate where cases are filed. North Carolina is divided into Eastern, Western and Middle Districts, each assigned to particular counties in the state. The Western District of North Carolina has two major divisions where clerks maintain offices and filing can be made. These are the Asheville and Charlotte divisions. The Asheville division receives filing for cases heard at the Bryson division, and Charlotte receives filing for the Shelby and Wilkesboro divisions. The Eastern District is based in Wilson, with a divisional office in Raleigh. The Middle District of North Carolina has offices called Greensboro and Winston-Salem.
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Filing
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All three North Carolina bankruptcy districts require documents to be filed electronically through the electronic case filing (ECF) system, and receive paper documents only in limited exceptions. If a debtor or lawyer obtains an exemption for special circumstances, they can file by hand or facsimile. Certain exhibits to a filing can be accepted in document form as well. In the Eastern and Middle districts, a petition will not be accepted without a case matrix containing the names and addresses of creditors and their counsel. The Western District, which provides an electronic form for the matrix, orders the clerk to issue a notice of deficient filing if a matrix is not filed with the petition.
Chapter 7 Eligibility
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In any state, a debtor is subject to a means test to determine her Chapter 7 eligibility. This test compares the debtor's income to the median family income of their state as determined by the U.S. Census Bureau. In 2009, the median income for a single wage earner in North Carolina was $38,478. A family of two had a median income of $52,355, while a family of three had a median income of $57,301, and a family of four $70,134. The median income of larger households is calculated for means test purposes by adding $6,900 for each additional member. If the debtor's income is less than the appropriate family median income, he qualifies to file for Chapter 7 bankruptcy.
Exemptions
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If a debtor qualifies for Chapter 7, she is eligible to use certain exemptions to protect some property from liquidation. North Carolina does not allow bankruptcy debtors to use the federal exemptions. Instead, the state allows debtors to exempt $18,500 for a homestead, or $37,000 for spouses. Up to $5,000 worth of household goods, clothes, appliances, books, animals, crops or musical instruments can be exempted, plus an addition $1,000 in property for each dependent up to four. The state also exempts from liquidation most pensions, public benefits, insurance benefits and certain annuity proceeds. There's also a $3,500 exemption for a motor vehicle, and $2,000 for tools of trade necessary for employment.
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References
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