Will I Lose my Jewelry if I File Bankruptcy in Atlanta, Georgia?

Debtors who file bankruptcy in Atlanta, Georgia can normally keep their jewelry when they file Chapter 7 or Chapter 13 bankruptcy in Atlanta, Georgia. In my Atlanta, Georgia bankruptcy practice, I rarely see anyone lose personal items such as jewelry when they file bankruptcy because Georgia law provides exemptions or protection of personal property for bankruptcy filers.

Under the Georgia exemption statute, a person filing Chapter 7 bankruptcy can “exempt” (or protect) up to $500 worth of jewelry. If the person is filing jointly with a spouse, each gets to claim the $500 exemption. Also, the Georgia exemption law allows each person an extra $600 for a “wildcard” exemption that can be applied to jewelry. Finally, each individual bankruptcy filer can also take up to $5,000 of his or her unused real estate or homestead exemption and apply it to jewelry as well. Thus, it is rare that a bankruptcy filer will ever risk losing his or her jewelry in a Chapter 7 case.

How to Apply Georgia Bankruptcy Exemptions

So, an individual filing Chapter 7 bankruptcy in Georgia can exempt up to $6,100.00 worth of jewelry ($500 + $600 + $5,000 = $6,100), and a couple filing jointly can protect up to $12,200 worth of jewelry ($1000 + $1200 + $10,000 = $12,200).

Valuing Jewelry for the Purpose of Bankruptcy

If you suspect that your jewelry is worth more than $6,100 (for an individual) or $12,200 (for a married couple), I would advise you to get that jewelry valued. Unfortunately, most jewelry is vastly overpriced by retailers. So, the engagement ring that you think is worth $15,000 will be worth only $2,500 to a wholesale jewelry buyer. While a low estimate won’t make you feel very good about your watches and rings, a low written appraisal will help convince your Chapter 7 bankruptcy trustee that your jewelry is not worth the effort to liquidate.

Chapter 7 Trustee Liquidation

In a Georgia Chapter 7 case, a trustee is assigned to your case for the purpose of determining whether you have any assets that can be sold to repay creditors. Thus, if the Chapter 7 bankruptcy trustee does decide that your jewelry is worth more than the Georgia exemptions allow you to protect, you have the right to take the valuation question to the bankruptcy judge for a ruling, or you can offer to make payments on the estate’s interest in the jewelry, usually for 6 months to a year, in order to “buy the trustee out.”

Chapter 13 Will Allow You to Keep Property

Even if you own jewelry that is worth significantly more than the Georgia bankruptcy exemptions, filing Chapter 13 bankruptcy in Georgia can protect property from liquidation, including jewelry because Chapter 13 bankruptcy filers are obligated to repay their debts in an amount equal to the value of the unprotected property.

If you are considering filing for bankruptcy in Atlanta, Georgia, contact the Law Offices of Charles Clapp at 404.585.0040 to schedule a free initial consultation.