The North Carolina Answer in One Paragraph
North Carolina filers choose between Chapter 7 (liquidation, 3-4 months, strong discharge rate) and Chapter 13 (3-5 year repayment plan, better for saving a home from foreclosure or for filers above the means test). Three North Carolina-specific inputs drive the choice: (1) the North Carolina means test median of $63,339 for a 1-person household, (2) the North Carolina homestead exemption of $35,000 ($70,000 joint), and (3) the local filing mix and outcome data below. Everything else on this page is elaboration on those three factors.
Quick Side-by-Side
Chapter 7 in North Carolina
Chapter 13 in North Carolina
North Carolina Means Test Thresholds (April 2026)
North Carolina's single-person median of $63,339 is below the national average. Most filers here clear Part 1 of the means test on income alone and qualify for Chapter 7 without running the full Part 2 expense deduction.
| Household Size | North Carolina Median Income |
|---|---|
| 1-person household | $63,300 |
| 2-person household | $82,300 |
| 3-person household | $96,300 |
| 4-person household | $112,100 |
| 5-person household | $121,600 |
| 6-person household | $131,100 |
For household sizes above 6, add $11,100 per additional member. Full details at the North Carolina means test calculator. For a general discussion, see our means test overview.
North Carolina Homestead Exemption and the Chapter Choice
North Carolina's homestead exemption protects $35,000 ($70,000 joint) of primary-residence equity under NCGS 1C-1601. If your home equity is below that amount, Chapter 7 can usually wipe out your unsecured debt without putting the home at risk. If your equity exceeds the exemption, Chapter 13 is typically the right tool to keep the home while cramming down or curing mortgage arrears over 3-5 years.
North Carolina is a state-exemptions-only jurisdiction. The federal exemption scheme under 11 U.S.C. Section 522(d) is not available. Review the full exemption list at bankruptcyexemptionsbystate.com/north-carolina before assuming any specific asset is safe.
Homestead amount (North Carolina): $35,000 ($70,000 joint). Statute: NCGS 1C-1601.
North Carolina's Chapter 7 vs Chapter 13 Filing Mix
Warning sign: North Carolina's Ch. 7/13 mix is unusual. Of 827 consumer cases in the federal database, 67.0% are Chapter 13 and only 33.0% are Chapter 7. That is the inverse of the national average (where Chapter 7 accounts for roughly two-thirds of filings). This pattern is driven in part by local practitioner habit, trustee posture, and court-level plan-confirmation dynamics. If a North Carolina attorney steers you toward Chapter 13, ask explicitly why Chapter 7 is not the right fit for your facts -- not for the local default.
Why does filing mix matter? Attorney fee structures often favor Chapter 13 (paid through the plan rather than up-front), which can produce local-market bias toward Chapter 13 that is not driven by individual debtor facts. FJC data lets you see whether North Carolina's mix matches the economics of the typical filer's situation.
North Carolina Federal Court Data
Numbers below come from the Federal Judicial Center Integrated Database, covering 827 consumer bankruptcy cases filed in North Carolina's federal bankruptcy courts.
| Chapter | Cases Filed | Discharge Rate (resolved) |
|---|---|---|
| Chapter 7 | 273 | n/a |
| Chapter 13 | 554 | n/a |
National-average completion rates apply: Chapter 7 discharges over 93% of the time, Chapter 13 about 40-50% (the remainder dismissed before plan completion).
Which Chapter Fits Which North Carolina Filer?
- If your income is below the North Carolina median ($63,339, 1-person) and you own little non-exempt property: Chapter 7 is almost certainly the right choice. Fast, cheap, and the highest discharge rate in consumer bankruptcy.
- If you are behind on your mortgage or car loan and want to keep the collateral: Chapter 13 lets you cure arrears over 36 to 60 months while the automatic stay blocks foreclosure and repossession.
- If a North Carolina attorney steers you to Chapter 13 despite passing the means test: get a specific, written reason tied to your assets, income, or debts. Local default in North Carolina is Chapter 13-heavy; your facts may still fit Chapter 7.
- If you have high home equity and North Carolina caps the homestead exemption: run the numbers on Chapter 13 cramdown, lien stripping (for wholly underwater junior liens), and the federal BAPCPA homestead cap before assuming Chapter 7 is safe.
- If you have filed before within the lookback windows: use the 1328(f) discharge screener first -- a prior Chapter 7 discharge bars another Chapter 7 for 8 years, and a prior Chapter 13 discharge bars another Chapter 13 for 2 years.
Rule of thumb for North Carolina: if you qualify for Chapter 7 on the means test AND your home equity is within the $35,000 ($70,000 joint) homestead, Chapter 7 is almost always the right choice. Chapter 13 is the right answer when specific facts (arrears, non-exempt equity, prior Chapter 7 within 8 years) rule Chapter 7 out.
Frequently Asked Questions
Is Chapter 7 or Chapter 13 better in North Carolina?
For most North Carolina filers who pass the means test, Chapter 7 is faster, cheaper, and succeeds more often. Chapter 13 is the right choice if you need to save a home from foreclosure, cure arrears, catch up on priority taxes, or cannot qualify for Chapter 7.
What is the Chapter 7 income limit in North Carolina?
There is no hard dollar limit. The means test compares your 6-month average income (annualized) to the North Carolina median for your household size. One person: $63,339. Four person: $112,100. Above-median filers can still qualify by running Part 2 expense deductions.
Can I use federal bankruptcy exemptions in North Carolina?
No. North Carolina opted out of the federal bankruptcy exemption scheme. Filers must use state exemptions exclusively.
How much home equity is protected in North Carolina bankruptcy?
North Carolina's homestead exemption protects $35,000 ($70,000 joint) under NCGS 1C-1601. Federal BAPCPA limits (11 U.S.C. Section 522(p)) can cap this at approximately $214,000 for a residence acquired within 1,215 days of filing.
How long does bankruptcy take in North Carolina?
Chapter 7 takes 3 to 4 months from filing to discharge in North Carolina federal bankruptcy court. Chapter 13 takes 3 years (below-median) or 5 years (above-median) of monthly plan payments before discharge.
Can I switch from Chapter 13 to Chapter 7 in North Carolina?
Yes. Under 11 U.S.C. Section 1307(a), a Chapter 13 debtor in North Carolina generally has the right to convert to Chapter 7 at any time, as long as the case was not previously converted from Chapter 7. You must still pass the means test at the time of conversion.
Related North Carolina Resources
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Last updated: 2026-04-18. Not legal advice. Statutory homestead and median-income figures are reproduced from public sources and may lag statutory amendments -- verify against current state statute before relying.
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