As a Georgia bankruptcy attorney, one of the most common questions I hear from potential clients is, “Will I be able to keep my furniture if I file bankruptcy?” In Georgia, the answer to this question in almost every case is yes.
The exemption law in Georgia for furniture states that any bankruptcy debtor may exempt “the debtor’s interest, not to exceed $300 in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor. The exemption of the debtor’s interest in the items contained in this paragraph shall not exceed $5,000.00 in total value” [see GA Code 44-13-100(4)].
Just the other day, I was meeting with bankruptcy a client in my Rome GA office who was panicked about the prospect of losing her household furnishings. Once I explained to her how the application of the statute works, she calmed down.
The issue is how much is the furniture worth? The cost to replace furniture with brand new items is not the issue. The question is how much would I pay to replace your sofa with a similar sofa with a similar amount of wear and tear on it? The answer is that I would go to a garage sale to find one. The odds of me paying more than $300 for any item at a garage sale is extremely low.
Its works the same way for electronics. You may have paid $1000 for the flat screen television. However, if you were to sell that same television at a garage sale, what is the likelihood that you could get more than $300.00? How would a potential buyer no whether not something was wrong with the television? Does it have short in it? Do all of the buttons work properly? Has the screen ever been hit by anything? Why is that scratch on there? Will it still be covered by a warranty? These types of concerns usually drive down garage sale prices.
Another way to look at the situation is to ask, if there were no exemption law and the trustee was going to sell my household furnishings, how much money would they receive? I would argue that a bankruptcy trustee would receive no more than you would at a garage sale.
I want to emphasize here that the question is not how much money would you take for it? Sometimes people may get sentimental about their personal items and won’t sell for a reasonable price. How much you would take for the item is not relevant. How much would the trustee take for it is relevant.
Antiques are a much different story. If you have antiques, you will most likely need to get some kind of appraisal on the antiques before you file bankruptcy. Some antiques can command a high sales price.
If you are a single person and your the total value of your furniture is less than $5000 with no single item being worth more than $300, you will not lose any of your household furnishings if you file for bankruptcy. If you are married and the total value of your furniture is less than $10,000.00 with no single item being worth more than $300.00, you will not lose any furniture if you file for bankruptcy.
In addition to the furniture exemption, Georgia has a $5,000 wildcard exemption for each debtor that can be used on any item.
I have been a Georgia consumer bankruptcy attorney since December 1998. In the hundreds of cases that I have filed, I’ve never seen a single debtor have furniture taken away from them because the value was too high.