How do I Protect My Property When I File Bankruptcy in Georgia?

Filing bankruptcy in Atlanta, Georgia is scary to debtors who do not know if they can protect property in bankruptcy. The good news is that protecting cars, homes, and other assets in bankruptcy is normally an easy process, as bankruptcy exemptions in Georgia allow Chapter 7 filers to protect assets from liquidation or sale by the bankruptcy trustee.

Chapter 13 Is The Better Bankruptcy For Debtors With Equity In Assets

However, if a potential bankruptcy filer has assets that exceed the value of the allowable exemptions in Georgia, Chapter 13 may be a better option. In a Chapter 13 bankruptcy case, a debtor with unexempt assets may pay back unsecured creditors an amount that is equal to the amount of equity in property. Performing what is called a liquidation analysis as though the debtor filed Chapter 7 would determine the amount of money to which unsecured creditors would be entitled in a Chapter 13 bankruptcy case.

How Equity Is Determined in Bankruptcy

For example, if a debtor owns a home that is worth $210,000 and has a mortgage of $175,000, the debtor may take the $10,000 homestead exemption in Georgia but will have some equity left after the exemption. The calculation would be as follow:

Fair Market Value of Home: $210,000 Mortgage Lien: $175,000 Cost of Sale @ 10%: $21,000 Georgia Homestead Exemption: $10,000 (per individual)
Equity: $4,000.00

Keep Your Home With a Chapter 13 Bankruptcy

In the scenario above, a Chapter 13 debtor would pay at least $4,000.00 back to his or her unsecured creditors. If the debtor had more equity in other property, such as bank accounts or vehicles, the debtor would have to pay back the amount of equity in the other property. Paying back the amount of equity allows the bankruptcy filer to keep his home, car, and bank accounts in a Chapter 13 bankruptcy in Georgia.

Thus, while losing your car or home may be a fear when filing bankruptcy in Georgia, the reality is that a bankruptcy lawyer in Georgia will be able to conduct an analysis of your situation to ensure that you do keep your car and home when you file bankruptcy. Call the Law Offices of Charles Clapp for further information on how to keep your car and home in bankruptcy.