Bankruptcy Is Growing in North Carolina
Bankruptcy filings are climbing again across the United States. Federal court data show a 16 percent increase from 2023 to 2024. Early 2025 numbers point to even more growth.
In North Carolina, the rise is clear in every district—Raleigh, Wilmington, New Bern, Jacksonville, and surrounding coastal counties. Higher prices at the grocery store, bigger credit-card balances, and adjustable-rate mortgages all play a part.
Why you should care
- More neighbors are seeking debt relief, which means bankruptcy is losing its old stigma.
- Courts and trustees are busier, so timing your case matters.
Creditors know filings are trending up and may get aggressive to collect before you act.
How Rising Filings Touch Real People
| Group in NC | Common Debt Pressures |
| Military families (Cherry Point, Fort Liberty) | Frequent moves, spouse unemployment, private student loans |
| Retirees on fixed income | Rising medical costs, credit cards used for daily expenses |
| Small-business owners on the coast | Tourist-season swings, lingering COVID loans, merchant cash advances |
| First-time homeowners | Adjustable-rate mortgages, HOA fees, repair bills |
Signs You May Be Heading Toward Bankruptcy
Use this quick checklist:
- You are 60+ days late on a mortgage, car, or personal-loan payment.
- You rotate cards each month just to pay utilities or groceries.
- Collectors call daily or you have court notices pinned to your door.
- You are thinking about borrowing from a 401(k) or pension to stay afloat.
- Your checking account is at risk of garnishment.
If two or more boxes are checked, it is time to explore debt relief options.
Filing Bankruptcy in North Carolina—What to Know
Chapter 7 vs. Chapter 13
| Chapter 7 | Chapter 13 | |
| Income test? | Must pass Means Test | No income cap |
| How long? | 3-6 months | 3-5 years payment plan |
| Keep house/car? | Maybe, if payments current and equity fits NC exemptions | Yes, if you keep paying through plan |
| Stops collections? | Yes, immediate stay | Yes, immediate stay |
Who Benefits Most From Bankruptcy Right Now?
- Military members: Federal law caps interest on certain debts while on active duty and protects service pay.
- Retirees: Social Security and many pensions are exempt assets in NC.
- Small-business owners: Subchapter V of Chapter 11 lets businesses with under $7.5 million of debt reorganize faster and cheaper than old Chapter 11 rules.
- Families with student loans: Bankruptcy cannot always erase federal loans, but it can free up cash by clearing credit cards, medical bills, or unsecured lines of credit.
Alternatives to Bankruptcy?
- Debt settlement companies
- May cut balances but fees are high.
- No court protection; lawsuits can continue.
- Debt management plans through credit-counseling agencies
- Interest rates may drop, but payments often last 5 years.
- Home refinance or HELOC
- Harder with higher interest rates.
- Get a free debt relief consult with us
Reach out to one of our NC Board Certified Attorneys.
Frequently Asked Questions
Q: What is the bankruptcy filing rate in North Carolina right now?
A: The Bankruptcy filing rate rose by 15% in June 2025, compared to June 2024.
Q: Will filing hurt my spouse’s credit?
A: A spouse who does not file keeps a separate credit report. Only joint debts will show bankruptcy status.
Q: Can I keep my car in Chapter 7?
A: Often yes, if you are current on payments and equity is below NC’s $3,500 motor-vehicle exemption (2025 amount).
Q: How soon can I buy a home after bankruptcy?
A: Some FHA loans allow a mortgage two years after Chapter 7 discharge if you meet income and credit-rebuild guidelines.
Q: Does bankruptcy wipe out tax debt?
A: Older income taxes may be dischargeable if returns were filed on time. Payroll taxes and recent returns are not.
Talk With a Bankruptcy Attorney/Debt Relief Attorney for Free
Feeling the squeeze? The sooner you get answers, the more choices you keep.
- Free, confidential consultation for residents from Raleigh to the coast.
- No pressure—just clear guidance on Chapter 7, Chapter 13, or non-bankruptcy options.
- Offices in Wilmington. Remote video meetings available statewide.
