Georgia Bankruptcy Exemptions Protect Chapter 7 Filers From Losing House, Cars, and Assets
Chapter 7 and Chapter 13 bankruptcy filers often fear that they will lose everything by filing bankruptcy in Atlanta, Georgia. They consider their 401k or pension and worry about how they will live after retirement. They assume that they will lose their home, car, or money. Luckily, these fears are usually unfounded. The perception that filing for bankruptcy, especially Chapter 7, which allows filers to “wipe out” their debt, equals losing everything you own is a myth!
When you file bankruptcy, the law provides exemptions which allow you to protect certain types of property from taking. These exemptions are governed by state law. While Georgia’s provisions, found in O.C.G.A. 44-13-100, are both less generous than exemption laws found in some other states and less generous than the federal exemptions that some states have chosen to adopt, there are substantial exemptions that Georgia filers can use to shield their hard earned assets.
Perhaps the best news for Georgia filers is that assets in their 401ks and pensions are completely exempt so long as the accounts are unliquidated.
Debtors are almost always worried about whether they can keep their homes and cars in bankruptcy. Homeowners are allowed to shield the first $10,000 of equity in their residential real property. Married homeowners who file jointly are allowed to shield $20,000 worth of equity. If this exemption is not used, then half of it, $5,000 or $10,000 may be used to protect any other property.
Debtors who file bankruptcy in Georgia can also keep their cars. $3,500 of equity in one given vehicle is exempt and married co-filers may claim two vehicles for a total of $7,000. Vehicle equity is determined by subtracting the amount owed from the vehicle’s current worth. Here’s how the math works. Let’s say that your vehicle is worth $12,000 but you financed it and still owe $9,000. This means that you only have $3,000 in equity in it and you are well below the limit of the exemption! That means you can keep your car in a bankruptcy case.
What about the stuff inside your home–your furniture, electronics, clothes? Each filer is allowed to protect $5,000 in household goods. That’s a $10,000 property exemption when married clients file jointly. Chances are that you will not have to surrender your couch or your television, as household items are given “garage sale” values. Finally, Georgia law allows a $600 per filer wildcard exemption that can be used to cover categories where assets may exceed the exemption limits.
As you can see, there are a variety of exemptions under bankruptcy and Georgia law that is designed to protect your house, car, and other property. Deciding to file bankruptcy is am important decision. If you are making this decision please consult a qualified attorney. For a free consultation please contact 404.585.0040 or email at email@example.com.