The biggest concern Georgia debtors have when they decide to file bankruptcy is the uncertainty regarding their assets. Every state has different bankruptcy exemptions and Georgia is no exception. Georgia bankruptcy exemptions can make a big difference between keeping a beloved asset and having to possibly surrender it to the bankruptcy court. These exemptions don’t just cover the obvious assets we all think of: homes, vehicles, personal belongings and bank accounts. They can also cover benefits, retirement accounts and work tools (known as tools of the trade).
The exemption that is most important to owners is the homestead exemption. Every state varies in how much protection the equity in a home will receive. Georgia does have a homestead exemption and it does provide protection for a certain amount of equity held in a home. If the debtor is married, the exemption will provide $43,000 worth of exemptions to protect the equity in the home. A non-married debtor can use up to $21,500 in exemptions to protect the equity in their home. If they do not use the entire amount of the exemption, that portion can be used to protect other items. That is called the “Wildcard” and the debtor can use the unused portion remaining up to $5,000. If the debtor has more equity than the amount allotted by the state of Georgia, that portion will be non-exempt.
Georgia also allows a reasonable exemption to vehicle owners. Whether you own your vehicle outright or have a large amount of equity in your vehicle, Georgia’s motor vehicle exemption should allow the majority of debtors to protect their vehicle despite filing bankruptcy. The state of Georgia allows the debtor to protect up to $5,000 of the equity in their vehicle. When you consider the fact that if they don’t use the full homestead exemption, they can potentially have an additional $5,000 to use as well, their vehicles should be safe from the bankruptcy court.
Many debtors don’t realize that they must value their personal belongings when filing bankruptcy. Georgia’s exemptions for personal belongings are generous as a whole, but not necessarily for individual items. The state of Georgia grants debtors up to $5,000 in exemptions for their personal belongings. Personal belongings are meant to include: furniture, clothing, household goods, appliances, musical instruments, animals and crops. However, the items are only allowed to be exempted at $300 maximum per item. The total of the items are exempt up to $5,000. In addition, the debtor can protect their jewelry up to $500 and health aids and lost future earnings recoveries needed for support up to $7500. Personal injury lawsuit recoveries or settlements are protected up to $10,000 as well.
Like most states, tax exempt accounts such as 401(k)’s and 403(b)’s are exempt from the court. Other retirement accounts and pensions mostly fall into this category as well. However, IRA’s and Simple Roth IRA’s are only exempt up to $1,283,025. Public benefits, such as unemployment and workers compensation are protected as well. The state also has a tools of the trade exemption that protects tools, books and related items used in the process of the profession of the debtor. There are many exemptions related to health insurance and life insurance. If a debtor has a question about what would be protected, they would be advised to seek assistance from legal counsel or research the Georgia bankruptcy exemptions thoroughly so they understand their rights.
The final exemption all debtors receive is $1,200 in wildcard exemptions. These exemptions can be used for any item the debtor decides to protect. In addition, the debtor can also use the non-used portion of the homestead exemption, up to $5,000 (sometimes $10,000), to protect the remainder of their non-exempt property.
A debtor should always look to the state’s current exemptions, as well as the exceptions to the exemptions, before assuming their items are protected. Exemptions should be understood by the debtor prior to filing as they will determine what the debtor keeps and how much they might owe if they don’t want to lose certain personal items. It is always advisable to consult with an experienced attorney who can help break down the bankruptcy process and the exemptions that can make or break a debtor’s case from a financial and personal standpoint.