1. The Timing Applies to Discharges, Not Filing:
   • You can technically file a Chapter 13 case before these time limits, but you won’t receive a discharge unless you meet the specific waiting period requirements.
   • For example, you might file a Chapter 13 case shortly after a Chapter 7 case to catch up on missed payments (like a mortgage) without seeking a discharge.
2. Court and Creditor Approval:
   • Filing multiple bankruptcies in a short period may lead to increased scrutiny from the bankruptcy court or creditors. You’ll need to demonstrate good faith in your filings.

Maximum GROSS income for each family size to file a Chapter 7 without taking the means test:

6  – $138,937 / $69,468.50 

How to tell if they are a Chapter 13

Always try to guide a person to a Chapter 7 or Debt Busters UNLESS they answer yes to any of the 7 questions below.

• FAMILY SIZE/GROSS INCOME
  • Are they OVER the “family size (actual dependents) GROSS income”  allowed? – This is before taxes and payroll deductions (but after business expenses for business owners), including all bonuses, gifts, child support, alimony, withdrawals from retirement or life insurance, proceeds from lawsuits, gambling winnings, etc.
  • Have they received a windfall in the last 6 months or expect one in the next year that will push them over the allowed income?
  • If they are on the edge of the income allowed, tell them.
• REAL ESTATE
  • If they own a house they live in AND do they have MORE than $35k per owner in equity, and ARE NOT covered by “Tenancy by the Entirety”?
  • Do they have joint debt (other than secured debt they are keeping) and are exempting their home by Tenancy by the Entirety?
  • Do they have any real estate that is not their home that they are not willing to give up?
• VEHICLES
  • Does each filer have one vehicle with equity of $3.5k or less in it that the  the Wild Card will not cover?
  • Do they have more than one vehicle with equity in it that the Wild Card will not cover?
• PROPERTY OF VALUE
  • Do they own anything of value that is not covered by exemptions, such as stock, investments, jewelry, guns, RV, boat, 4-wheelers, that they want to keep?
• BEHIND ON SECURED DEBT
  • Are they behind on any secured debt like vehicles and homes that they want to keep?

• TRANSFERRED PROPERTY/MONEY

• • In the past 2 years or paid money/given property to a friend, family member, or business insider in the past 2 years?  If so, they may need to file Chapter 13.
• $5K Wild Card
  • Does any filer have more than $5k in liquid assets: Bank, Credit Union, in your Pocket, in Stock, Bond, Investments, NFTs, Crypto, Cash App, PayPal, Venmo, Whole Life Ins., I.U.L., Trusts, Business Accounts and other areas where the Wild Card is used- ANYWHERE except 401(k)s, 403(b)s, 457(b)&(f)s, and IRAs? If so, they may have to spend it wisely to not lose it in a Chapter 7.

If they have lived in NC for less than 90 days, we can start working on the bankruptcy, but not actually file it until they have lived in NC for at least 90 days.

Key Rules for Determining Applicable Exemptions

1. 730-Day Rule (2 Years): To use your current state’s exemptions, you must have lived there continuously for at least 730 days (2 years) before filing for bankruptcy.
2. 180-Day Rule: If you haven’t lived in your current state for 2 years, you’ll need to use the exemptions from the state where you lived for the majority of the 180 days immediately before the 2-year period preceding your bankruptcy filing.
3. Federal Exemptions: If the state determined by the 180-day rule doesn’t allow non-residents to use its exemptions, or if you don’t qualify under either rule, you may use federal bankruptcy exemptions.

• How These Limits Work in NC

  • Eligibility: If your household’s gross annual income is below the limit for your family size, you generally qualify for Chapter 7 bankruptcy.
  • Above the Limit: If your income exceeds the limit, you may still qualify by calculating your disposable income after deducting allowable expenses.

  🚫 Income/Savings NOT counted in the Means Test:

  • Social Security benefits
    (This includes Social Security Retirement, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI).)
  • Payments to victims of war crimes, crimes against humanity, or terrorism
    (Such as payments from special government programs.)
  • VA disability benefits (in some circumstances)
    (This can depend a little based on how it’s structured, but often it’s protected.)
  • Alimony and child support, and separate maintenance are exempt if necessary for support. Other wise they are counted.

  IMPORTANT NOTE: If any of this exempt income is kept in a bank account where ANY non-exempt income has been deposited, it is no longer exempt.

  ✅ Income that IS counted in the Means Test:

  • Wages, salary, bonuses, commissions, overtime
  • Spouse’s gross income
  • Business income (after deducting business expenses)
  • Alimony and child support, and separate maintenance are exempt if necessary for support. Other wise they are counted.
  • Unemployment income (normally)
  • Rental income
  • Retirement income (like pensions or 401(k) withdrawals)
  • Life insurance withdrawals
  • Money won in Lawsuits
  • Money won in gambling
  • Other regular income (like side hustles, freelance work, or trust payments)

  In North Carolina, when filing for bankruptcy, certain assets are protected through state-specific exemptions, ensuring you can retain essential property. Unlike some states, North Carolina mandates the use of its own exemption laws, disallowing the federal bankruptcy exemptions. Here’s an overview of the key exemptions available:

  🏡 Homestead Exemption

  • Amount: Up to $35,000 in equity for real or personal property used as a residence.
  • Married Couples: Can double the exemption to $70,000 if both are on the title.
  • Seniors: Individuals aged 65 or older may claim up to $60,000 if the property was previously owned with a deceased spouse.
  • Burial Plots: If not using the homestead exemption, up to $35,000 can be applied to burial plots.

  🚗 Motor Vehicle Exemption

  • Amount: Up to $3,500 in equity for one motor vehicle.
  • Note: This exemption doesn’t apply to vehicles purchased within 90 days before filing.

  🛋️ Personal Property Exemption

  • Household Goods: Up to $5,000 for items like furniture, appliances, and clothing. – (We never see this bothered by a Trustee)
  • Dependents: An additional $1,000 per dependent, up to $4,000 total.
  • Tools of Trade: Up to $2,000 for tools and equipment necessary for your profession.
  • Health Aids: Prescribed health aids are fully exempt.

  🃏 Wildcard Exemption

  • Unused Homestead: If you haven’t used the full homestead exemption, you can apply up to $5,000 of the unused portion to any property.
  • Additional Amount: An extra $500 exemption is available for any property.
  • Restrictions: Cannot be applied to property purchased within 90 days before filing.

  💼 Wages and Support

  • Wages: Earned but unpaid wages for work done 60 days before filing are exempt.
  • Support Payments: Alimony, child support, and separate maintenance are exempt if necessary for support.

  💵 Public Benefits and Insurance

  • Fully Exempt:
  • Unemployment compensation
  • Workers’ compensation
  • Crime victims’ compensation
  • Aid to the blind and families with dependent children
  • Future Social Security benefits
  • Veterans benefits
  • Insurance:
  • Life insurance for the benefit of the debtor’s children or spouse is exempt.
  • Employee group life insurance policies are fully exempt.

  📚 Retirement and Education Accounts

  • Retirement Accounts: Most tax-exempt pensions and retirement accounts, including 401(k)s, 403(b)s, and IRAs, are fully exempt.
  • College Savings: Qualified college savings accounts are exempt up to $25,000, with certain limitations on recent contributions.

  It’s important to note that to claim these exemptions, you must have resided in North Carolina for at least 730 days (2 years) before filing. If you haven’t met this requirement, you may need to use exemptions from your previous state of residence.

  What Is the Wildcard Exemption?

  The Wildcard Exemption permits you to shield additional personal property that may not be covered under other specific exemptions.

  💰 How Much Can You Exempt?

  1. Up to $5,000: If you haven’t fully utilized your homestead exemption (which protects equity in your primary residence), you can apply up to $5,000 of the unused portion to other personal property.
  2. Additional $500: Regardless of your homestead exemption usage, North Carolina provides an extra $500 exemption that can be applied to any property.

  🛑 Important Restrictions

  • Recent Purchases: The Wildcard Exemption cannot be applied to tangible personal property purchased within 90 days before filing for bankruptcy, unless the purchase was made by converting other exempt property.
  • Residency Requirement: To claim North Carolina exemptions, including the Wildcard, you must have resided in the state for at least 730 days (2 years) prior to filing.

  📝 Example

  Suppose you have $30,000 in equity in your home and claim the full $35,000 homestead exemption. In this case, you wouldn’t have any unused homestead exemption to apply as a Wildcard. However, you can still utilize the additional $500 exemption to protect other assets.

  Conversely, if you only claim $30,000 of the homestead exemption, you have $5,000 remaining, which can be applied to other personal property, in addition to the $500 exemption.

  
  Tenancy by the Entirety

  Tenancy by the Entirety is a special way that married couples can own real estate together in North Carolina.
  Here’s how it works:

  • Both spouses own 100% of the property together — not 50/50, but truly both owning all of it.
  • Neither spouse can sell, mortgage, or give away the property without the other’s consent.
  • If one spouse dies, the other one automatically becomes the full owner without needing to go through probate.
  • It offers strong protection from creditors — if only one spouse has a debt, a creditor usually can’t take the house to pay for it.
    (But if both spouses owe the debt together, the house could be at risk.)

  Quick example:
  If only the husband has a credit card debt, the creditor can’t put a lien on the house if it’s owned as tenancy by the entirety — because the wife owns it fully too!

  Important facts for North Carolina:

  • It’s automatic for married couples if they buy real estate together and the deed says something like “husband and wife.”
  • It only applies to real estate (like a house or land) — not cars, bank accounts, or personal items.
  • Divorce ends tenancy by the entirety — then the couple usually becomes “tenants in common,” meaning they each own a part separately.

What Does Not Get Discharged:

In a Chapter 7

1. tax debt,
2. student loans,
3. alimony,
4. alimony,
5. child support,
6. debt due to fraud,
7. restitution,
8. court cost,
9. any secured debt that is kept,
10. and court fines are not discharged.

The exception to this redemption of a vehicle  If the filer’s vehicle is worth less than what they own on it they can pay what the vehicle is worth in a lump sum.

https://722Redemption.com may loan the money for this.  Then the remaining secured debt would be discharged even though they are keeping the vehicle.

In a Chapter 13

1. tax debt,
2. alimony arrears (not already in court order),
3. child support arrears (not already in court order),
   debt due to fraud,
4. restitution,
5. attorney fees,
6. and Trustee fees are paid in full.

Any secure debt that is behind is caught up.

Vehicle loans in a Chapter 13 are paid 100% in the plan unless they have been owned by the filer for over 2.5 years. Then the filer can pay what the vehicle is worth in the bankruptcy vs the whole loan amount.

Clients we don’t take:

1. Anyone with a bad attitude,
2. Anyone who complains much about another attorney
3. General Contractors,
4. Car salespeople,
5. Preachers,
6. Large business owners
7. Business owners without good records,
8. Anyone who has filed bankruptcy unsuccessfully 3 times in the last 3 years.