Filing for bankruptcy can feel overwhelming, especially when your home is at stake. Many Raleigh homeowners worry that bankruptcy automatically means losing their house—but that’s not always the case. The outcome largely depends on the type of bankruptcy you file and how much equity you have in your home. At the Law Office of Calvin Craig, we help Raleigh residents understand their options and protect what matters most.

Chapter 7 Bankruptcy and Your Home

 Chapter 7 is known as "liquidation" bankruptcy. In this type of case, your non-exempt assets can be sold to repay creditors. However, both federal and North Carolina law allow you to exempt a certain amount of home equity, meaning you may be able to keep your home if your equity falls within the allowed limit. If your home is worth significantly more than what you owe and the exemption limit, the bankruptcy trustee may sell it.

Key factors include:

• Your current mortgage balance
• Your home’s market value
• The applicable exemption amount

If you’re current on your mortgage and your equity is protected by the homestead exemption, you may be able to keep your home.

Chapter 13 Bankruptcy and Your Home

 Chapter 13 bankruptcy allows you to reorganize your debts and pay them off over three to five years. This option is often ideal for those who are behind on mortgage payments but want to avoid foreclosure. Under Chapter 13, you can catch up on missed payments while keeping your home—provided you stay current on the repayment plan and future mortgage obligations.

Foreclosure Protection in Bankruptcy

 Both Chapter 7 and Chapter 13 offer something called the “automatic stay.” This is a court order that immediately stops most collection actions, including foreclosure. While this stay is temporary, it gives you time to explore your options and potentially save your home.

Homestead Exemption in North Carolina

 North Carolina offers a homestead exemption of up to $35,000 in equity for individuals and up to $70,000 for certain married couples or individuals over age 65. If your home’s equity is within this range, it is more likely to be protected in a bankruptcy case.

Get Guidance from a Raleigh Bankruptcy Attorney

Every case is different, and the best way to protect your home is to work with an attorney who understands both the law and your unique situation. At the Law Office of Calvin Craig, we help Raleigh residents explore debt relief strategies that protect their homes whenever possible.

 Filing for bankruptcy doesn’t necessarily mean losing your home. With the right exemptions and the right bankruptcy chapter, many Raleigh homeowners can keep their property. At the Law Office of Calvin Craig, we’re here to help you understand your rights and move forward with confidence.