The Chapter 7 Trustee filed an objection to the Debtor's claim for property exemptions under N.C. Gen. Stat. § 1C-1601(a)(8). The Trustee objected to the portion of a monetary settlement reached between the Debtor and her former employer for lost wages, arguing that the payment does not constitute “compensation for personal injury” as required by § 1C-1601(a)(8).
     Section 1C-1601(a)(8) does not provide a definition for “compensation for personal injury” and the North Carolina judiciary has not directly considered the scope of the available exemption. The Court looked to pertinent bankruptcy decisions examining the statute to conclude that, for compensation to be exempted under § 1C-1601(a)(8), it must be linked or attributable to personal injury. The Court also looked to the analytical approach employed by the United States Supreme Court, which considered similarly worded legislation. See Comm’r v. Schleier, 515 U.S. 323 (1995) and O’Gilvie v. United States, 519 U.S. 79 (1996). The Court found that the analytical approach employed in Schleier and O’Gilvie, which is applicable to the comparable phrasing within § 1C-1601(a)(8), clarifies and connects the underlying reasoning of those bankruptcy court decisions considering the scope of the North Carolina personal injury exemption.
     In applying this approach to § 1C-1601(a)(8), the Court found the portion of the Debtor’s settlement directed to lost wages does not constitute “compensation for personal injury” as the lost wages were not attributable to, and were wholly independent of, any alleged personal injury to the Debtor.