§ 1C-1601. What property exempt; waiver; exceptions.
Article 16.
Exempt Property.
§ 1C‑1601. Whatproperty exempt; waiver; exceptions.
(a) Exempt property. Eachindividual, resident of this State, who is a debtor is entitled to retain freeof the enforcement of the claims of creditors:
(1) The debtor's aggregateinterest, not to exceed thirty‑five thousand dollars ($35,000) in value,in real property or personal property that the debtor or a dependent of thedebtor uses as a residence, in a cooperative that owns property that the debtoror a dependent of the debtor uses as a residence, or in a burial plot for thedebtor or a dependent of the debtor; however, an unmarried debtor who is 65years of age or older is entitled to retain an aggregate interest in theproperty not to exceed sixty thousand dollars ($60,000) in value so long as theproperty was previously owned by the debtor as a tenant by the entireties or asa joint tenant with rights of survivorship and the former co‑owner of theproperty is deceased.
(2) The debtor'saggregate interest in any property, not to exceed five thousand dollars($5,000) in value of any unused exemption amount to which the debtor isentitled under subdivision (1) of this subsection.
(3) The debtor'sinterest, not to exceed three thousand five hundred dollars ($3,500) in value,in one motor vehicle.
(4) The debtor'saggregate interest, not to exceed five thousand dollars ($5,000) in value forthe debtor plus one thousand dollars ($1,000) for each dependent of the debtor,not to exceed four thousand dollars ($4,000) total for dependents, in householdfurnishings, 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'saggregate interest, not to exceed two thousand dollars ($2,000) in value, inany implements, professional books, or tools of the trade of the debtor or thetrade of a dependent of the debtor.
(6) Life insurance asprovided in Article X, Section 5 of the Constitution of North Carolina.
(7) Professionallyprescribed health aids for the debtor or a dependent of the debtor.
(8) Compensation forpersonal injury, including compensation from private disability policies orannuities, or compensation for the death of a person upon whom the debtor wasdependent for support, but such compensation is not exempt from claims forfuneral, legal, medical, dental, hospital, and health care charges related tothe accident or injury giving rise to the compensation.
(9) Individualretirement plans as defined in the Internal Revenue Code and any plan treatedin the same manner as an individual retirement plan under the Internal RevenueCode, including individual retirement accounts and Roth retirement accounts asdescribed in section 408(a) and section 408A of the Internal Revenue Code,individual retirement annuities as described in section 408(b) of the InternalRevenue Code, and accounts established as part of a trust described in section408(c) of the Internal Revenue Code.
(10) Funds in a collegesavings plan qualified under section 529 of the Internal Revenue Code, not toexceed a cumulative limit of twenty‑five thousand dollars ($25,000), butexcluding any funds placed in a college savings plan account within thepreceding 12 months (except to the extent any of the contributions were made inthe ordinary course of the debtor's financial affairs and were consistent withthe debtor's past pattern of contributions) and only to the extent that thefunds are for a child of the debtor and will actually be used for the child'scollege or university expenses.
(11) Retirement benefitsunder the retirement plans of other states and governmental units of otherstates, to the extent that these benefits are exempt under the laws of the stateor governmental unit under which the benefit plan is established.
(12) Alimony, support,separate maintenance, and child support payments or funds that have beenreceived or to which the debtor is entitled, to the extent the payments orfunds are reasonably necessary for the support of the debtor or any dependentof the debtor.
(b) Definitions. Asused in this section, the following definitions apply:
(1) "InternalRevenue Code" means Code as defined in G.S. 105‑228.90.
(2) "Value"means fair market value of an individual's interest in property, less validliens superior to the judgment lien sought to be enforced.
(c) Waiver. Theexemptions provided in this Article cannot be waived except by:
(1) Transfer of propertyallocated as exempt (and in that event only as to the specific propertytransferred);
(2) Written waiver,after judgment, approved by the clerk or district court judge. The clerk ordistrict court judge must find that the waiver is made freely, voluntarily, andwith full knowledge of the debtor's rights to exemptions and that he is notrequired to waive them; or
(3) Failure to assertthe exemption after notice to do so pursuant to G.S. 1C‑1603. The clerkor 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 thirdparties 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 propertypurchased by the debtor less than 90 days preceding the initiation of judgmentcollection proceedings or the filing of a petition for bankruptcy, unless thepurchase of the property is directly traceable to the liquidation or conversionof property that may be exempt and no additional property was transferred intoor used to acquire the replacement property.
(e) Exceptions. Theexemptions provided in this Article are inapplicable to claims:
(1) Of the United Statesor its agencies as provided by federal law;
(2) Of the State or itssubdivisions for taxes, appearance bonds or fiduciary bonds;
(3) Of lien by a laborerfor work done and performed for the person claiming the exemption, but only asto the specific property affected;
(4) Of lien by amechanic for work done on the premises, but only as to the specific propertyaffected;
(5) For payment ofobligations contracted for the purchase of the specific real property affected;
(6) Repealed by SessionLaws 1981 (Regular Session, 1982), c. 1224, s. 6, effective September 1, 1982;
(7) For contractualsecurity interests in the specific property affected; provided, that theexemptions shall apply to the debtor's household goods notwithstanding anycontract for a nonpossessory, nonpurchase money security interest in any suchgoods;
(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 GeneralStatutes;
(10) For criminal restitutionorders docketed as civil judgments pursuant to G.S. 15A‑1340.38.
(f) Federal BankruptcyCode. The exemptions provided in The Bankruptcy Code, 11 U.S.C. § 522(d), arenot applicable to residents of this State. The exemptions provided by this Articleand by other statutory or common law of this State shall apply for purposes ofThe Bankruptcy Code, 11 U.S.C. § 522(b).
(g) Effect ofexemptions. Notwithstanding any other provision of law, a creditor shall notobtain possession of a debtor's household goods and furnishings in which thecreditor holds a nonpossessory, nonpurchase money security interest until thecreditor has fully complied with the procedures required by G.S. 1C‑1603. (1981, c. 490,s. 1; 1981 (Reg. Sess., 1982), c. 1224, ss. 1‑7, 20; 1991, c. 506, s. 1;1995, c. 250, s. 1; 1998‑212, s. 19.4(j); 1999‑337, s. 2; 2005‑401,s. 1; 2009‑417, s. 1.)