North Carolina State Bankruptcy Exemptions
Article X, Section 1. Personal property exemptions
The personal property of any resident of this State, to a value fixed by the
General Assembly but not less than $ 500, to be selected by the resident, is
exempted from sale under execution or other final process of any court, issued
for the collection of any debt.
Article X, Section 2. Homestead exemptions
(1) Exemption from sale; exceptions. Every homestead and the dwellings and
buildings used therewith, to a value fixed by the General Assembly but not less
than $ 1,000, to be selected by the owner thereof, or in lieu thereof, at the
option of the owner, any lot in a city or town with the dwellings and buildings
used thereon, and to the same value, owned and occupied by a resident of the
State, shall be exempt from sale under execution or other final process
obtained on any debt. But no property shall be exempt from sale for taxes, or
for payment of obligations contracted for its purchase.
(2) Exemption for benefit of children. The homestead, after the death of the
owner thereof, shall be exempt from the payment of any debt during the minority
of the owner's children, or any of them.
(3) Exemption for benefit of surviving spouse. If the owner of a homestead dies,
leaving a surviving spouse but no minor children, the homestead shall be exempt
from the debts of the owner, and the rents and profits thereof shall inure to
the benefit of the surviving spouse until he or she remarries, unless the
surviving spouse is the owner of a separate homestead.
(4) Conveyance of homestead. Nothing contained in this Article shall operate to
prevent the owner of a homestead from disposing of it by deed, but no deed made
by a married owner of a homestead shall be valid without the signature and
acknowledgement of his or her spouse.
Article X, Section 5. Insurance
A person may insure his or her own life for the sole use and benefit of his or
her spouse or children or both, and upon his or her death the proceeds from the
insurance shall be paid to or for the benefit of the spouse or children or
both, or to a guardian, free from all claims of the representatives or
creditors of the insured or his or her estate. Any insurance policy which
insures the life of a person for the sole use and benefit of that person's
spouse or children or both shall not be subject to the claims of creditors of
the insured during his or her lifetime, whether or not the policy reserves to
the insured during his or her lifetime any or all rights provided for by the
policy and whether or not the policy proceeds are payable to the estate of the
insured in the event the beneficiary or beneficiaries predecease the insured.
General Statutes of North Carolina
§ 1C-1601. What property exempt; waiver; exceptions
(a) Exempt property. -- Each individual, resident of this State, who is a debtor
is entitled to retain free of the enforcement of the claims of creditors:
(1) The debtor's aggregate interest, not to exceed ten thousand dollars ($
10,000) in value, in real property or personal property that the debtor or a
dependent of the debtor uses as a residence, in a cooperative that owns
property that the debtor or a dependent of the debtor uses as a residence, or
in a burial plot for the debtor or a dependent of the debtor.
(2) The debtor's aggregate interest in any property, not to exceed three
thousand five hundred dollars ($ 3,500) in value less any amount of the
exemption used under subdivision (1).
(3) The debtor's interest, not to exceed one thousand five hundred dollars ($
1,500) in value, in one motor vehicle.
(4) The debtor's aggregate interest, not to exceed three thousand five hundred
dollars ($ 3,500) in value for the debtor plus seven hundred fifty dollars ($
750.00) for each dependent of the debtor, not to exceed three thousand dollars
($ 3,000) total for dependents, in household furnishings, household goods,
wearing apparel, appliances, books, animals, crops, or musical instruments,
that are held primarily for the personal, family, or household use of the
debtor or a dependent of the debtor.
(5) The debtor's aggregate interest, not to exceed seven hundred fifty dollars
($ 750.00) in value, in any implements, professional books, or tools of the
trade of the debtor or the trade of a dependent of the debtor.
(6) Life insurance as provided in Article X, Section 5 of the Constitution of
North Carolina.
(7) Professionally prescribed health aids for the debtor or a dependent of the
debtor.
(8) Compensation for personal injury or compensation for the death of a person
upon whom the debtor was dependent for support, but such compensation is not
exempt from claims for funeral, legal, medical, dental, hospital, and health
care charges related to the accident or injury giving rise to the compensation.
(9) Individual retirement plans as defined in the Internal Revenue Code and any
plan treated in the same manner as an individual retirement plan under the
Internal Revenue Code. For purposes of this subdivision, "Internal Revenue
Code" means Code as defined in G.S. 105-228.90.
(b) Definition. -- "Value" as used in this Article means fair market value of an
individual's interest in property, less valid liens superior to the judgment
lien sought to be enforced.
(c) Waiver. -- The exemptions provided in this Article and in Sections 1 and 2
of Article X of the North Carolina Constitution, cannot be waived except by:
(1) Transfer of property allocated as exempt (and in that event only as to the
specific property transferred), or
(2) Written waiver, after judgment, approved by the clerk or district court
judge. The clerk or district court judge must find that the waiver is made
freely, voluntarily, and with full knowledge of the debtor's rights to
exemptions and that he is not required to waive them;
(3) Failure to assert the exemption after notice to do so pursuant to G.S.
1C-1603. The clerk or district court judge may relieve such a waiver made by
reason of mistake, surprise or excusable neglect, to the extent that the rights
of innocent third parties are not affected.
(d) Recent purchases. -- The exemptions provided in subdivisions (2), (3), (4)
and (5) of subsection (a) of this section are inapplicable with respect to
tangible personal property purchased by the debtor less than 90 days preceding
the initiation of judgment collection proceedings or the filing of a petition
for bankruptcy.
(e) Exceptions. -- The exemptions provided in this Article are inapplicable to
claims
(1) Of the United States or its agencies as provided by federal law;
(2) Of the State or its subdivisions for taxes, appearance bonds or fiduciary
bonds;
(3) Of lien by a laborer for work done and performed for the person claiming
the exemption, but only as to the specific property affected;
(4) Of lien by a mechanic for work done on the premises, but only as to the
specific property affected;
(5) For payment of obligations contracted for the purchase of the specific real
property affected;
(6) Repealed by Session Laws 1981 (Regular Session, 1982), c. 1224, s. 6,
effective September 1, 1982;
(7) For contractual security interests in the specific property affected;
provided, that the exemptions shall apply to the debtor's household goods
notwithstanding any contract for a nonpossessory, nonpurchase money security
interest in any such goods;
(8) For statutory liens, on the specific property affected, other than judicial
liens;
(9) For child support, alimony or distributive award order pursuant to Chapter
50 of the General Statutes;
(10) For criminal restitution orders docketed as civil judgments pursuant to
G.S. 15A-1340.38.
(f) Federal Bankruptcy Act. -- The exemptions provided in The Bankruptcy Act, 11
U.S.C. § 522(d), are not applicable to residents of this State. The exemptions
provided by this Article shall apply for purposes of The Bankruptcy Act, 11
U.S.C. § 522(b).
(g) Effect of exemptions. -- Notwithstanding any other provision of law, a
creditor shall not obtain possession of a debtor's household goods and
furnishings in which the creditor holds a nonpossessory, nonpurchase money
security interest until the creditor has fully complied with the procedures
required by G.S. 1C-1603.
§ 1-362. Debtor's property ordered sold
The court or judge may order any property, whether subject or not to be sold
under execution (except the homestead and personal property exemptions of the
judgment debtor), in the hands of the judgment debtor or of any other person,
or due to the judgment debtor, to be applied towards the satisfaction of the
judgment; except that the earnings of the debtor for his personal services, at
any time within 60 days next preceding the order, cannot be so applied when it
appears, by the debtor's affidavit or otherwise, that these earnings are
necessary for the use of a family supported wholly or partly by his labor.
§ 97-21. Claims unassignable and exempt from taxes and debts; agreement of
employee to contribute to premium or waive right to compensation void; unlawful
deduction by employer
No claim for compensation under this Article shall be assignable, and all
compensation and claims therefor shall be exempt from all claims of creditors
and from taxes.
No agreement by an employee to pay any portion of premium paid by his employer
to a carrier or to contribute to a benefit fund or department maintained by
such employer for the purpose of providing compensation or medical services and
supplies as required by this Article shall be valid, and any employer who makes
a deduction for such purpose from the pay of any employee entitled to the
benefits of this Article shall be guilty of a Class 3 misdemeanor and upon
conviction thereof shall be punished only by a fine of not more than five
hundred dollars ($ 500.00). No agreement by an employee to waive his right to
compensation under this Chapter shall be valid.
§ 96-17. Protection of rights and benefits; attorney representation; prohibited
fees; deductions for child support obligations
(a) Waiver of Rights Void. -- Any agreement by an individual to waive, release,
or commute his rights to benefits or any other rights under this Chapter shall
be void. Any agreement by any individual in the employ of any person or concern
to pay all or any portion of an employer's contributions, required under this
Chapter from such employer, shall be void. No employer shall directly or
indirectly make or require or accept any deduction from the remuneration of
individuals in his employ to finance the employer's contributions required from
him, or require or accept any waiver of any right hereunder by any individual
in his employ. Any employer or officer or agent of an employer who violates any
provision of this subsection shall, for each offense, be fined not less than
one hundred dollars ($ 100.00) nor more than one thousand dollars ($ 1,000) or
be imprisoned for not more than six months, or both.
(b) Representation. -- Any claimant or employer who is a party to any proceeding
before the Commission may be represented by (i) an attorney; or (ii) any person
who is supervised by an attorney, however, the attorney need not be present at
any proceeding before the Commission.
(b1) Fees Prohibited. -- Except as otherwise provided in this Chapter, no
individual claiming benefits in any administrative proceeding under this
Chapter shall be charged fees of any kind by the Commission or its
representative, and in any court proceeding under this Chapter each party shall
bear its own costs and legal fees.
(c) No Assignment of Benefits; Exemptions. -- Except as provided in subsection
(d) of this section, any assignment, pledge, or encumbrance of any right to
benefits which are or may become due or payable under this Chapter shall be
void; and such rights to benefits shall be exempt from levy, execution,
attachment, or any other remedy whatsoever provided for the collection of
debts; and benefits received by any individual, so long as they are not mingled
with other funds of the recipient, shall be exempt from any remedy whatsoever
for the collection of all debts except debts incurred for necessaries furnished
to such individual or his spouse or dependents during the time when such
individual was unemployed. Any waiver of any exemption provided for in this
subsection shall be void.
(d) (1) Definitions. -- For the purpose of this subsection and when used herein:
a. "Unemployment compensation" means any compensation found by the Commission
to be payable to an unemployed individual under the Employment Security Law of
North Carolina (including amounts payable by the Commission pursuant to an
agreement under any federal law providing for compensation, assistance or
allowances with respect to unemployment) provided, that nothing in this
subsection shall be construed to limit the Commission's ability to reduce or
withhold benefits, otherwise payable, under authority granted elsewhere in this
Chapter including but not limited to reductions for wages or earnings while
unemployed and for the recovery of previous overpayments of benefits.
b. "Child support obligation" includes only obligations which are being
enforced pursuant to a plan described in section 454 of the Social Security Act
which has been approved by the Secretary of Health and Human Services under
Part D of Title IV of the Social Security Act.
c. "State or local child support enforcement agency" means any agency of this
State or a political subdivision thereof operating pursuant to a plan described
in subparagraph b. above.
(2) a. An individual filing a new claim for unemployment compensation shall, at
the time of filing such claim, disclose whether the individual owes child
support obligations, as defined under subparagraph (1)b. of this subsection. If
any such individual discloses that he or she owes child support obligations and
is determined by the Commission to be eligible for payment of unemployment
compensation, the Commission shall notify the State or local child support
enforcement agency enforcing such obligation that such individual has been
determined to be eligible for payment of unemployment compensation.
b. Upon payment by the State or local child support enforcement agency of the
processing fee provided for in paragraph (4) of this subsection and beginning
with any payment of unemployment compensation that, except for the provisions
of this subsection, would be made to the individual during the then current
benefit year and more than five working days after the receipt of the
processing fee by the Commission, the Commission shall deduct and withhold from
any unemployment compensation otherwise payable to an individual who owes child
support obligations:
1. The amount specified by the individual to the Commission to be deducted and
withheld under this paragraph if neither subparagraph 2. nor subparagraph 3. of
this paragraph is applicable; or
2. The amount, if any, determined pursuant to an agreement submitted to the
Commission under section 454(20)(B)(i) of the Social Security Act by the State
or local child support enforcement agency, unless subparagraph 3. of this
paragraph is applicable; or
3. Any amount otherwise required to be so deducted and withheld from such
unemployment compensation pursuant to properly served legal process, as that
term is defined in section 462(e) of the Social Security Act.
c. Any amount deducted and withheld under paragraph b. of this subdivision
shall be paid by the Employment Security Commission to the appropriate State or
local child support enforcement agency.
d. The Department of Health and Human Services and the Commission are hereby
authorized to enter into one or more agreements which may provide for the
payment to the Commission of the processing fees referred to in subparagraph b.
and the payment to the Department of Health and Human Services of unemployment
compensation benefits withheld, referred to in subparagraph c., on an open
account basis. Where such an agreement has been entered into, the processing
fee shall be deemed to have been made and received (for the purposes of fixing
the date on which the Commission will begin withholding unemployment
compensation benefits) on the date a written authorization from the Department
of Health and Human Services to charge its account is received by the
Commission. Such an authorization shall apply to all processing fees then or
thereafter (within the then current benefit year) chargeable with respect to
any individual name in the authorization. Any agreement shall provide for the
reimbursement to the Commission of any start-up costs and the cost of providing
notice to the Department of Health and Human Services of any disclosure
required by subparagraph a. Such an agreement may dispense with the notice
requirements of subparagraph a. by providing for a suitable substitute
procedure, reasonably calculated to discover those persons owing child support
obligations who are eligible for unemployment compensation payments.
(3) Any amount deducted and withheld under paragraph (2) of this subdivision
shall, for all purposes, be treated as if it were paid to the individual as
unemployment compensation and then paid by such individual to the State or
local child support enforcement agency in satisfaction of the individual's
child support obligations.
(4) a. On or before April 1 of 1983 and each calendar year thereafter, the
Commission shall set and forward to the Secretary of Health and Human Services
for use in the next fiscal year, a schedule of processing fees for the
withholding and payment of unemployment compensation as provided for in this
subsection, which fees shall reflect its best estimate of the administrative
cost to the Commission generated thereby.
b. At least 20 days prior to September 25, 1982, the Commission shall set and
forward to the Secretary of Health and Human Services an interim schedule of
fees which will be in effect until July 1, 1983.
c. The provisions of this subsection apply only if arrangements are made for
reimbursement by the State or local child support agency for all administrative
costs incurred by the Commission under this subsection attributable to child
support obligations enforced by the agency.
§ 108A-36. Assistance not assignable; checks payable to decedents
The assistance granted by this Article shall not be transferable or assignable
at law or in equity; and none of the money paid or payable as assistance shall
be subject to execution, levy, attachment, garnishment, or other legal
processes, or to the operation of any bankruptcy or insolvency law.
In the event of the death of a public assistance recipient during or after the
first day of the month for which assistance was previously authorized by the
county social services board, or county director if waived, any public
assistance check or checks payable to such recipient not endorsed prior to such
recipient's death shall be delivered to the clerk of superior court and by him
administered under the provisions of G.S. 28A-25-6.
§ 111-18. Payment of awards
After an award to a blind person has been made by the board of county
commissioners, and approved by the Department of Health and Human Services the
Department of Health and Human Services shall thereafter pay to such person to
whom such award is made the amount of said award in monthly payments, or in
such manner and under such terms as the Department of Health and Human Services
shall determine. Such payment shall be drawn upon such funds in the hands of
the State Treasurer, at the instance and request and upon a proper voucher
signed by the Secretary of Health and Human Services, and shall not be subject
to the provisions of the Executive Budget Act as to approval of said
expenditure.
It is intended that awards paid to recipients under this Article be for the
purpose of assisting in defraying the recipient's day-to-day living expenses.
To better achieve this purpose it is hereby provided that no moneys belonging
to a recipient of aid to the blind under this Article identifiable as moneys
paid pursuant to an aid to the blind award shall be subject to levy under
execution, attachment or garnishment.
§ 58-24-85. Benefits not attachable
No money or other benefit, charity, relief or aid to be paid, provided or
rendered by any society, shall be liable to attachment, garnishment or other
process, or to be seized, taken, appropriated or applied by any legal or
equitable process or operation of law to pay any debt or liability of a member
or beneficiary, or any other person who may have a right thereunder, either
before or after payment by the society.
§ 58-58-165. Exemption from execution
No policy of group insurance, nor the proceeds thereof, when paid to any
employee or employees thereunder, shall be liable to attachment, garnishment,
or other process, or to be seized, taken, appropriated or applied by any legal
or equitable process or operation of law, to pay any debt or liability of such
employee, or his beneficiary, or any other person who may have a right
thereunder, either before or after payment; but the proceeds thereof, when made
payable to the estate of the employee insured, shall constitute a part of the
estate of such employee available for the payment of debts.
§ 143-166.6. Awards exempt from taxes
Any award made under the provisions of this Article shall be exempt from
taxation by the State or any political subdivision. The Industrial Commission
shall not be responsible for any determination of the validity of any claims
against said awards and shall distribute the death benefit awards directly to
the dependent or dependents entitled thereto under the provisions of this
Article.
§ 128-31. Exemptions from execution
Except for the applications of the provisions of G.S. 110-136, and G.S.
110-136.3 et seq., and in connection with a court-ordered equitable
distribution under G.S. 50-20, the right of a person to a pension, an annuity,
or a retirement allowance, to the return of contributions, the pension, annuity
or retirement allowance itself, any optional benefit or any other right accrued
or accruing to any person under the provisions of this Article, and the moneys
in the various funds created by this Article, are exempt from levy and sale,
garnishment, attachment, or any other process whatsoever, and shall be
unassignable except as in this Article specifically otherwise provided.
Notwithstanding any provisions to the contrary, any overpayment of benefits to
a member in a State-administered retirement system or Disability Salary
Continuation Plan may be offset against any retirement allowance, return of
contributions or any other right accruing under this Chapter to the same
person, the person's estate, or designated beneficiary.
§ 135-9. Exemption from garnishment, attachment, etc
Except for the applications of the provisions of G.S. 110-136, and G.S.
110-136.3 et seq., and in connection with a court-ordered equitable
distribution under G.S. 50-20, the right of a person to a pension, or annuity,
or a retirement allowance, to the return of contributions, the pension, annuity
or retirement allowance itself, any optional benefit or any other right accrued
or accruing to any person under the provisions of this Chapter, and the moneys
in the various funds created by this Chapter, are exempt from levy and sale,
garnishment, attachment, or any other process whatsoever, and shall be
unassignable except as in this Chapter specifically otherwise provided.
Notwithstanding any provisions to the contrary, any overpayment of benefits to
a member in a State-administered retirement system or the former Disability
Salary Continuation Plan or the Disability Income Plan of North Carolina may be
offset against any retirement allowance, return of contributions or any other
right accruing under this Chapter to the same person, the person's estate, or
designated beneficiary.
§ 59-55. Nature of a partner's right in specific partnership property
(a) A partner is co-owner with his partners of specific partnership property
holding as a tenant in partnership.
(b) The incidents of this tenancy are such that:
(1) A partner, subject to the provisions of this Act and to any agreement
between the partners, has an equal right with his partners to possess specific
partnership property for partnership purposes; but he has no right to possess
such property for any other purpose without the consent of his partners.
(2) A partner's right in specific partnership property is not assignable except
in connection with the assignment of rights of all the partners in the same
property.
(3) A partner's right in specific partnership property is not subject to
attachment or execution, except on a claim against the partnership. When
partnership property is attached for a partnership debt the partners, or any of
them, or the representatives of a deceased partner, cannot claim any right
under the homestead or exemption laws.
(4) On the death of a partner his right in specific partnership property vests
in the surviving partner or partners, except where the deceased was the last
surviving partner, when his right in such property vests in his legal
representative. Such surviving partner, or partners, or the legal
representative of the last surviving partner, has no right to possess the
partnership property for any but a partnership purpose.
(5) A partner's right in specific partnership property is not subject to dower,
curtesy, or allowances to widows, heirs, or next of kin.
§ 120-4.29. Exemption from garnishment, attachment
Except for the applications of the provisions of G.S. 110-136, and in
connection with a court-ordered equitable distribution under G.S. 50-20, the
right of a person to a pension, annuity, or retirement allowance, to the return
of contributions, or to the receipt of the pension, annuity or retirement
allowance itself, any optional benefit or any other right accrued or accruing
to any person under the provisions of this Article, and the moneys in the
various funds created by this Article, are exempt from levy and sale,
garnishment, attachment, or any other process whatsoever, and shall be
unassignable except as this Article specifically provides. Notwithstanding any
provisions to the contrary, any overpayment of benefits to a member in a
state-administered retirement system or Disability Salary Continuation Plan may
be offset against any retirement allowance, return of contributions or any
other right accruing under this Chapter to the same person, the person's
estate, or designated beneficiary.
§ 15B-17. Award not subject to taxation or execution
(a) An award is exempt from taxation.
(b) An award is not subject to execution, attachment, garnishment, or other
process, except that, upon receipt of an award by a claimant, the part of the
award that is for allowable expense is not exempt from such an action by a
creditor to the extent that he provides products, services, or accommodations
the costs of which are included in the award, and the part of the award that is
for work loss is not exempt from such an action to secure payment of alimony,
maintenance, or child support.
Note: Exemptions may have changed since our last update.
» Back to Bankruptcy Laws In Your State