Bankruptcy is a difficult choice for a debtor to make, because of the emotional and credit consequences and because of the possible loss of real and personal property. However, while chapter 7 bankruptcy does require some liquidation of property, there are statutes that provide exemptions for certain types and values of property. George statutes require that residents use the state exemptions and not those provided in federal regulations. However, it is important to understand those exemptions before making this far-reaching decision.
How to Keep Your Car
State and federal exemptions differ in this area:
- Federal exemption – $3,225
- Georgia state exemption – $3,500
However, that vehicle can still be repossessed if it is security for a loan and the debtor fails to make the required payments.
How to Keep Your Home
- Federal homestead exemption - $20,200
- Georgia state exemption – $10,000 for real or personal property, including a co-op, that is used as a residence (subject to doubling, whether the spouse is filing or not)
- Unused property exemption applicable to other property – up to $5,000
While the property will be protected from liquidation up to the exempt amount, the debtor can still face foreclosure if they fail to make any mortgage or loan payments secured by that property.
Georgia allows exemptions for other forms of personal property:
- Clothing, household goods, appliances, books, musical instruments, furnishings, animals, and crops – up to $300 per item and $5,000 total
- Health aids
- Necessary lost future earnings recoveries – up to $7,500
- Personal injury recoveries – up to $10,000
- Wrongful death recoveries required for support
- Burial plot – in lieu of homestead
- Tools of the trade – including books, tools, and implements – up to $1,500
- Any additional property – up to $600
Filing Schedule C of a Bankruptcy Petition
Schedule C must include a listing of all property exemption claims and be included with the bankruptcy petition. That listing must include:
- A list of each property exemption
- The Georgia statutes that apply to each exemption claim
- The exemption value of each exemption claim
- The current assessed value of each exemption claim (not the market value)
Talk to a Georgia Bankruptcy Attorney
While the exemptions allowed under Georgia law can provide powerful protections, if they are not claimed appropriately and if the debtor does not understand all the options available to them, there can be unnecessary delays or even rejection of the claims or the entire bankruptcy petition. This complex process can require the guidance of a knowledgeable Georgia bankruptcy attorney to complete and prepare the filer for a more stable financial future.
