How To File Bankruptcy for Free in North Carolina

Collect Your North Carolina Bankruptcy Documents

When you file for bankruptcy, you need to submit the following documents, even if you’re filing with an attorney:

• Your past two years of tax returns 

• Your paycheck stubs for the past 60 days

• A bank account statement that covers the bankruptcy filing date

Aside from that, there are a number of documents you can collect that will make filling out your bankruptcy forms (or a questionnaire about the bankruptcy forms) easier because they’ll have certain information you’ll need. Some of the documents that have proven helpful for people as they prepare their bankruptcy petition are: 

• Bank account statements showing your expenses for the past six to 12 months 

• Your credit report

• Creditor statements/bills for any types of debt that may not appear on your credit report

• Letters from collection agencies or other third-party debt collectors 

You can get a free copy of your credit report from all three credit reporting agencies every year, and you can request them online.

Take a Credit Counseling Course

The federal Bankruptcy Code requires anyone filing for bankruptcy to complete an approved credit counseling class within six months before they file. Congress requires this six-month window so you can learn about your options before you decide to file for bankruptcy. You must submit your course completion certificate to the bankruptcy court. 

There is a fee to take the course, but you may be able to get a fee waiver if you can show you can’t afford to pay the fee. 

North Carolina has three bankruptcy districts: the Western District, the Middle District, and the Eastern District. In North Carolina, Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations. Each district has a list of approved credit counseling providers on its website:

• Approved providers list for the Western District of North Carolina 

• Approved providers list for the Middle District of North Carolina 

• Approved providers list for the Eastern District of North Carolina 

Complete the Bankruptcy Forms

To start the Chapter 7 bankruptcy process without an attorney, you must fill out some lengthy forms. The forms are the same regardless of where you’re filing for bankruptcy, and they include instructions on how to fill them out. The forms are available as fillable PDFs for free online from the USCOURTS.GOV website. Go through the forms carefully and make sure you fill everything out completely.  

If you hire a bankruptcy attorney, the attorney or their staff will typically fill out the form based on the information you give them.

Get Your Filing Fee

To file for Chapter 7 bankruptcy, you’ll have to pay a filing fee of $338 Bring the fee with you when you go to file your case, preferably as a cashier’s check or money order, payable to "Clerk, U.S. Bankruptcy Court.”  If your current income is below 150% of the poverty guidelines, you may be eligible for a fee waiver. (See North Carolina’s Fee Waiver Eligibility Table below).

Once you file Chapter 7 bankruptcy, the automatic stay goes into effect. This ‘stays’ or ‘stops’ creditors from taking certain actions against you to collect on your debt. A creditor may be planning on wage garnishment, foreclosure, or repossession. The automatic stay prevents the creditor from doing these things - at least for a certain period of time - so you may be in a hurry to file to get this protection. 

If you can’t afford to pay the filing fee all at once, you can ask the court for a payment plan. You’ll likely have to pay a minimum initial amount and then equal monthly installment payments. This way, you can file and get the protections of the automatic stay.

Print Your Bankruptcy Forms

If you’re filing for bankruptcy in North Carolina without a lawyer, you must print out the bankruptcy forms, sign them, and submit them to the bankruptcy court. Print the forms on regular, white letter-size paper (8.5" x 11"), in black ink, and single-sided. Make sure you sign in all of the signature spots and that you’ve submitted all the necessary forms (a lot of them look alike). If you can, make a copy of everything you’re submitting to the court so you have it for your records.

File Your Forms With the North Carolina Bankruptcy Court

North Carolina has three bankruptcy districts — the Western District of North Carolina, the Middle District, and the Eastern District. You’ll file your bankruptcy petition in the district where you live. The Middle District of North Carolina has a list of the counties in each of the three districts. 

Attorneys may file bankruptcy documents online through the court’s Electronic Court Filing (ECF) system. Everyone else must file their documents in paper form, except in the Eastern District, which allows you to submit documents to the court online. Although you can mail in your documents, it’s best to deliver them personally to the clerk’s office at the courthouse. This way, the court clerk can confirm that you have all the documents you need to file and that you’ve signed everything you need to sign.

You’ll also want to check your district’s most recent COVID-19 measures as some filing options have changed due to the ongoing pandemic.

Mail Documents to Your Trustee

When you file for bankruptcy, the court will assign a number to your case and appoint a bankruptcy trustee to handle various aspects of your bankruptcy case. The court will notify you who the trustee is and typically your trustee will reach out to you, too. 

The court will then schedule a date for your creditors' meeting. You must submit a copy of your two most recent federal income tax returns to your trustee at least seven days before the creditors' meeting. You also must send your trustee a bank statement that covers the date of your bankruptcy filing. The trustee uses these documents to verify that the financial information you’ve given them is accurate. The trustee may ask for more documents if your information is incomplete. 

It’s important to comply with the trustee’s requests. Although the trustee doesn’t represent your interests, providing the trustee with everything they need will make the process go more smoothly and quickly. 

Take a Debtor Education Course

After the bankruptcy court determines you’ve complied with the bankruptcy requirements, the court will enter an order discharging your debts. To be eligible for discharge, you must first complete an approved debtor education course. The debtor education course teaches financial management. You must take the course within 60 days of your creditors’ meeting, either before or after the meeting. You also must file a certificate of completion with the bankruptcy court. If you don’t complete the course, the court could close your case without entering a discharge. 

In North Carolina, Bankruptcy Administrators approve debtor education courses. Each district maintains a list of approved debtor education providers on its website.

• Approved providers list for the Western District of North Carolina 

• Approved providers list for the Middle District of North Carolina 

• Approved providers list for the Eastern District of North Carolina

Attend Your 341 Meeting

The 341 meeting, or creditors' meeting, will happen about a month after you file for bankruptcy. A creditors’ meeting is an informal meeting that’s usually held in a courthouse office, but not in a courtroom. You must bring a government-issued picture ID and acceptable proof of your Social Security number.

Though your creditors can attend the meeting of creditors, they often don’t. Most meetings are just between the filer and the trustee. The trustee will place you under oath and ask you a series of standard questions. The trustee may ask additional questions if they need more information. 

Creditors’ meetings usually last about 10 minutes. The primary issue that comes up at the meeting is where the debtor has forgotten to bring identification or acceptable proof of their social security number. Once the creditors’ meeting is over, the bankruptcy process is almost complete.

As part of recent COVID-19 precautions, creditors’ meetings are temporarily being held via telephone or video conference in North Carolina.  

Dealing with Your Car

You might want to know if you can keep your car after you file for Chapter 7 bankruptcy.  Usually, you can, but it depends on your specific situation. If you own your car free and clear (you’re not making any monthly payments), and if it’s valued below the exemption amount, you can keep it. In North Carolina, as long as you didn’t buy your car with cash in the three months before filing bankruptcy, your vehicle’s worth is protected up to $3,500.

You may be leasing (renting) your car or financing it (making monthly payments until you own it). If you’re still making monthly loan payments, you have a few options. 

• You can surrender your car, and you won’t have to pay the rest of what you still owe on it. This might be a good idea if you owe more than the car’s worth and the payments are more than you can afford. 

• If you want to keep your car and continue making your car payments, you’ll have to enter into a reaffirmation agreement. 

• If you want to keep your car but not the loan, you’ll have to pay the car’s current value to the creditor in exchange for a clear vehicle title. This is called redeeming the vehicle.

If you want to buy another car after bankruptcy, it’s best to wait until after the court enters the discharge order. You also want to make sure you can afford any new monthly payments. You don’t want to get back into unmanageable debt.