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Written by Attorney Andrea Wimmer.
Updated July 30, 2020
North Carolina is one of the most diverse and beautiful places in the United States, but living there is just like living anywhere: Sometimes things don't go as planned. If you find yourself in more debt than you can manage, then filing a Chapter 7 bankruptcy in North Carolina may be the right path for you. The process of a Chapter 7 bankruptcy is what most folks imagine when they think about what filing a bankruptcy might be like: You are relieved from having to pay most of your debts (some things, like student loans, recent federal tax debts, child support obligations etc. will survive) and are protected from your creditors. In exchange, your creditors get the value of your non-exempt (unprotected) assets, if you have any. Everyone has assets (everything you own is an asset in bankruptcy, believe it or not), but most bankruptcy debtors are able to keep all of their assets even while getting a discharge from the bankruptcy court.
How to File Bankruptcy in North Carolina for Free
It often surprises people that bankruptcy courts and bankruptcy attorneys charge for their services. After all, folks who need to file for Chapter 7 bankruptcy in North Carolina typically don't really have the extra money to spend on all of that. The good news is that if your household income is less than 150% of the federal poverty guidelines, you will likely qualify for a waiver of the court filing fee and maybe even the cost of taking your required credit counseling courses. A North Carolina bankruptcy is a process you can navigate without an attorney, especially if you are filing Chapter 7, not Chapter 13. So, if you're willing to take the time and read up on what you'll need to do to get North Carolina bankruptcy relief without a lawyer, you're absolutely allowed to do so!
Collect Your North Carolina Bankruptcy Documents
It's helpful to collect your supporting documents before you start completing your bankruptcy forms. That way, when you are ready to start completing the bankruptcy forms needed to file Chapter 7 bankruptcy in North Carolina, you don't have to keep looking for more information. The documents you will needcan be categorized as income documents (e.g. paycheck stubs, tax returns) and documents related to your debts (e.g. a credit report, collection letters you have been receiving, lease agreements). If you plan on closing a bank account before filing bankruptcy in North Carolina, it's a good idea to get a copy of your bank statements for the last 6 months or so beforehand. This way, if you end up needing to access the bank statements, you will have them already and can avoid the often times consuming and sometimes expensive process of getting statements for a bank account that has been closed. Your North Carolina bankruptcy will go much more smoothly if you start (and stay) organized in collecting your documents.
Take Credit Counseling
Everyone who seeks bankruptcy protection must complete a credit counseling course before the case can be filed. This requirement applies to every person seeking relief by filing Chapter 7 bankruptcy in North Carolina. Generally, you do not have to go anywhere to complete this course, as it can be completed online or over the phone. You should only take credit counseling from a provider approved by the bankruptcy administrator serving your district. Since your North Carolina bankruptcy cannot be filed until after this is done, don't wait until the last minute to complete this requirement. Approved providers differ depending on whether you are in the Eastern, Middle or Western District, so be careful to make sure the provider works for you.
Complete the Bankruptcy Forms
This is where it all comes together. If you have hired an attorney to help you, their office will complete the bankruptcy forms necessary to file a Chapter 7 bankruptcy in North Carolina based on the information and documents you provided to them. If you are not able to pay for an attorney, you may want to check if you qualify for help through one of the legal aid organizations in your area. You can also complete the forms yourself by downloading everything needed when filing Chapter 7 in North Carolina as a fillable PDF for free. The bankruptcy forms are a combination of national forms in use by every bankruptcy court in the country, and some local forms, such as the local form for Schedule C, required in the Middle District. Carefully read all the instructions and questions to make sure you don't miss anything. It will take some time, but it will be time saved in the long run because you won't need to fix anything later.
Get Your Filing Fee
The court filing fee for a Chapter 7 bankruptcy in North Carolina is $335. You should bring the fee with you when you go to file your case, ideally as a cashier's check or money order, payable to "Clerk, U.S. Bankruptcy Court". If you cannot afford to pay the court filing fee all at once because a creditor is garnishing your paychecks, you can ask the court to give you a little bit of extra time by filing an application to pay the fee in installments. Remember, after filing Chapter 7 in North Carolina, the garnishment has to stop, and your paychecks will go back to normal. Finally, if your household income is less than 150% of the federal poverty guidelines, you can ask the court not to charge you by filing an application for a fee waiver.
Print Your Bankruptcy Forms
For the moment, the North Carolina bankruptcy court does not allow folks who don't have a lawyer (they are "pro se") to file their bankruptcy forms online. Instead, you have to bring a complete paper copy of your documents to the courthouse when filing bankruptcy in North Carolina. If you have your bankruptcy forms saved in a number of different PDF files on your computer, make sure to keep track of everything as you print it, as all the pages will look very much alike. Even though this is a legal proceeding, make sure you print your forms on regular sized paper (8.5”x11”), one page per sheet. Don't, for whatever reason, print double-sided. Since your original signature must appear on your forms, make sure to sign everything that needs to be signed. If you want, you can print a second copy of everything and ask the clerk to stamp it with the case number assigned to your Chapter 7 bankruptcy in North Carolina.
Go to Court to File Your Forms
You don't want the documents filed in your Chapter 7 bankruptcy in North Carolina to be outdated, so plan on going to the courthouse the same day that you print your forms, if possible. Make sure you bring your complete set of forms, and don't forget your credit counseling certificate and the court filing fee (or application for a waiver/installment plan). Since you will be entering a federal courthouse, don't forget to bring a picture ID and be prepared to go through security on your way in. Once there, make your way to the clerk's office and start filing Chapter 7 in North Carolina by handing everything to the person on the other side of the counter. When planning your day, keep in mind that this process can take a few minutes (even if there is no one in front of you), and make sure to check the clerk's office hours of operation if you plan on going there after 3:30 pm.
Mail Documents to Your Trustee
The trustee is the person assigned by the Bankruptcy Court to handle, or administer, your North Carolina bankruptcy. It's their job to review your bankruptcy forms and conduct an independent investigation to confirm that you are not hiding anything. The court will send the trustee a copy of everything you provided to the clerk when you went there for purposes of filing Chapter 7 in North Carolina, so you don't have to worry about that. You do have to make sure that you mail your most recent federal income tax return (probably the one for last year) to your trustee more than 7 days before your 341 meeting. This is required by the Bankruptcy Code. Your trustee may also ask that you provide some other supporting documents, such as bank statements or paycheck stubs before the 341 meeting. If possible, it's best to mail everything the trustee has asked for in one packet, rather than one piece at a time. After all, the more organized you are, the more smoothly your Chapter 7 bankruptcy in North Carolina will go.
Take Bankruptcy Course 2
One of the requirements when filing bankruptcy in North Carolina is the second bankruptcy course. You (and your spouse, if you are filing jointly) have to complete this class on financial management. Your certificate of completion should be filed within 60 days of the date first set for your creditors’ meeting. If you want, you can take the course before your creditors’ meeting, too, and it often makes sense to do so. If nothing else, it gets it out of the way, and you can't forget about it by accident later. If you forgot, the court will not enter your discharge, the very reason why you filed Chapter 7 bankruptcy in North Carolina in the first place. Better to get it over with early by pretending the creditors meeting is the deadline to get it done. As before - confirm the course you sign up for is approved by the bankruptcy administrator in your district.
Attend Your 341 Meeting
The 341 meeting, also known as the creditors' meeting, is a formal requirement for everyone filing bankruptcy in North Carolina, even though it is pretty informal in nature. Although it takes place at a courthouse, it's usually not held inside a courtroom. You will meet your case trustee, who will check your IDs and then ask you some questions about your bankruptcy case. There are no judges present, and more often than not, the only folks there are there for the same reason you are: they filed Chapter 7 bankruptcy in North Carolina. Since many of the meetings take less than 5 minutes, the court schedules several cases for the same half hour time slot. Creditors have the right to attend this meeting and ask you questions while you are under oath, but that rarely ever happens.
Dealing with Your Car
Chapter 7 bankruptcy in North Carolina provides you with several ways to deal with your car. As long as you didn't purchase your vehicle for cash in the three months before filing bankruptcy, state exemptions allow you to protect a vehicle worth up to $3,500. Of course, if you have a car loan, then it's ok if the car is worth more than that, because chances are your equity is less than $3,500. If you are in a car loan that you can't afford, filing Chapter 7 in North Carolina allows you to surrender the car without having pay on the rest of the loan. On the other hand, if you like your car and can afford to make the payments, entering into a reaffirmation agreement with the bank allows you to keep everything the same.
North Carolina Bankruptcy Means Test
The North Carolina means test for bankruptcy is the calculation that determines if you are eligible to file for relief under Chapter 7 of the Bankruptcy Code. The bottom line here is that if you can pay at least part of your debts, you should, by filing Chapter 13 instead. It starts by comparing your household income to how much other North Carolinians make. Even if you "fail" this first step (by making too much!) you may still be able to file a Chapter 7 bankruptcy in North Carolina if your allowed expenses make it impossible to pay back your debt.
Data on Median income levels for North Carolina
North Carolina Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
Data on Poverty levels for North Carolina
North Carolina Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Eastern District of North Carolina Requirements
The Eastern District of North Carolina is made up of the 44 eastern-most counties in the state and is broken into 5 divisions. If you are thinking of using the help of a bankruptcy petition preparer in this district, be aware that a number of them are not allowed to operate in this district, by order of the Bankruptcy Court. The court has published a comprehensive guide for folks who are in Chapter 7 bankruptcy in North Carolina without an attorney and even has information on how to fill out the forms to reaffirm your car loan correctly.
Middle District of North Carolina Requirements
The Middle District covers the 24 counties and has offices in 3 locations, though only the Greensboro and Winston-Salem offices are staffed by the bankruptcy clerk. Due to the Business 40 project, several streets through downtown Winston-Salem are closed, so make sure to check out the best way to get to the courthouse before heading to court to file your Chapter 7 bankruptcy in North Carolina.
Western District of North Carolina Requirements
The Western District of North Carolina extends over 13,563.9 square miles, serves 32 counties, and has been averaging approximately 336 new North Carolina bankruptcy cases per month since 2016. It's broken into four divisions, though the Shelby division's clerk's office is only staffed when court is in session. Neither the Asheville nor the Statesville office accept payments over the counter, and instead direct everyone to send their payments (in the form of a certified check or money order) to the court in Charlotte.
North Carolina Bankruptcy Forms
Most of the forms you are going to file with the court to start your Chapter 7 bankruptcy in North Carolina are national forms that are the same across the whole country. This is because the bankruptcy system is a federal system, which, other than some local variations, is pretty much the same everywhere you go. When you collect your online bankruptcy forms, it's important to use the official versions, all of which can be downloaded for free.
North Carolina Bankruptcy Exemptions
North Carolinians filing for bankruptcy have to use the North Carolina bankruptcy exemptions to protect their property. These exemption laws tell your creditors - and the bankruptcy trustee - that they cannot touch your furniture (including appliances), household goods, clothes, books and similar items if it's altogether worth less than $5,000. Similar provisions exist protecting your retirement accounts, tools of the trade, etc. You can protect up to $35,000 in equity in your home when you are in a Chapter 7 bankruptcy in North Carolina; however, if you don't need to use the entire amount, you can use up to $5,000 on anything else you own that would not otherwise be protected.
North Carolina Bankruptcy Lawyer Cost
Even though no one is ever happy to see a bankruptcy lawyer, some folks feel more comfortable having a lawyer assist them. The cost of a bankruptcy lawyer typically depends on how complex your case is compared to other cases. For Chapter 7 bankruptcy in North Carolina, folks usually pay around $1,150, but most of them only do so after meeting with their lawyer for a free consultation first.
Attorney cost estimate: $1,100 – $1,200
North Carolina Legal Aid Organizations
Going through a Chapter 7 bankruptcy in North Carolina can be complicated and if you don't think you can afford a lawyer, you should check out the legal aid options in your area. North Carolina legal aid serves low income individuals and families in civil (but not criminal) matters and most, if not all of them, offer bankruptcy assistance.
North Carolina Court Locations
Charles R. Jonas Federal Building
401 West Trade Street Charlotte, NC 28202
Gateway Plaza Building
402 West Trade Street Charlotte, NC 28202
United States Post Office
200 West Broad Street Statesville, NC 28677
300 Fayetteville Street Raleigh, NC 27601
434 Fayetteville Street
434 Fayetteville Street Raleigh, NC 27601
150 Reade Circle
150 Reade Circle Greenville, NC 27858
Federal Law Center
101 South Edgeworth Street Greensboro, NC 27401
North Carolina Judges
North Carolina Bankruptcy Judges
|Eastern District of North Carolina||Hon. Stephani W. Humrickhouse|
|Eastern District of North Carolina||Hon. David M. Warren|
|Eastern District of North Carolina||Hon. Joseph N. Callaway|
|Middle District of North Carolina||Hon. Catharine R. Aron|
|Middle District of North Carolina||Hon. Lena M. James|
|Middle District of North Carolina||Hon. Benjamin A. Kahn|
|Western District of North Carolina||Hon. Laura T. Beyer|
|Western District of North Carolina||Hon. Craig Whitley|
|Western District of North Carolina||Hon. George Hodges|
North Carolina Trustees
North Carolina Trustees