How to Keep Your Home Under a Chapter 7 Bankruptcy in North Carolina

When you file for Chapter 7 bankruptcy, you run the risk of your trustee selling your home to help pay off your debts. You can take several steps to stop this from happening and keep your home. In North Carolina, you must use state exemption limits when claiming exemptions on your home.

Instructions

1. Claim a homestead exemption on Bankruptcy Schedule C if you have less than $35,000 worth of equity in your home (as of 2010). On Schedule C, describe your property and list its value. The North Carolina exemption is higher than the federal exemption rate; in any case, as of 2010 North Carolina does not allow you to use federal exemptions.

2. Claim an exemption for being a tenant in entirety if you do not qualify for a homestead exemption and own your home jointly with your spouse. You can claim the value of your home on Schedule C using this exemption.

3. File for Chapter 13 bankruptcy in addition to Chapter 7 bankruptcy. If you file for Chapter 13, you can create a structured repayment plan to pay back your mortgage. Once you are approved for Chapter 13, any foreclosure proceedings stop unless you fail to make your payments on time. If you do not qualify for a homestead exemption, Chapter 13 often gives you the best chance of keeping your home, according to Bankruptcy Lawyers.

References

• Bankruptcy Action: North Carolina Exemptions
• Bankruptcy Lawyers: Property Exemptions in Bankruptcy
• North Carolina Bankruptcy Court Western District: Local Rules - Exemption Election