In most situations, you will not be asked to give up your car, house, or other property when filing for either a Chapter 13 or Chapter 7 bankruptcy. Bankruptcy laws recognize that when filing bankruptcy, people should be able to protect some of their property.
Although bankruptcies are filed in Federal Court, cases that are filed in Georgia are controlled by Georgia laws when it comes to what is considered exempt or sheltered from creditors. Examples of property that may be exempt include your pots and pans, clothes and most other personal items, televisions, and most furniture. Cars and homes may also be considered exempt, but your exemptions are usually limited to a certain value amount. Exempt items according to Georgia statute include the following:
- Up to $21,500 in real estate equity
- Up to $3,500 of motor vehicle equity
- Up to $5,000 of household goods equity
- Up to $500 of jewelry equity
- Up to $1,500 of tools of the trade equity
- As much as 100% of the value of your retirement plan, pension, IRA, and 401(k)
For spouses that file bankruptcy jointly, each spouse will be able to claim the exemption amounts and the statute would be doubled.
Chapter 7 Bankruptcy and Exemptions
Chapter 7 bankruptcy is the kind that typically wipes out all of your debts. When filing for Chapter 7 bankruptcy, we will identify what property would be exempt. Land and property that exceeds exemption limits will be considered non-exempt property, which means that you would either have to surrender that property to the bankruptcy trustee or make an offer to buy the trustee out of the estate’s interest in that particular property so you can keep it.
Chapter 13 Bankruptcy and Exemptions
A Chapter 13 bankruptcy creates a repayment plan by which your debts are repaid. By law, you will be required to pay creditors that are not secured the amount that you they would have received if you had turned over to a trustee any property that was not exempt. This amount is typically less than what you would have paid if you had paid the debt in full.
How do I Know if My Property is Exempt?
There is a good chance in most situations that your property will be exempt unless it is unusually valuable. Understanding Georgia’s exemption rules and how they apply to your property can be one of the most difficult parts of bankruptcy to understand.
In addition to property exemptions, there are special rules that apply to the settlement proceeds from certain types of personal injury claims and workers’ compensation claims. Bankruptcy procedures can also modify certain pawn shop transactions.
Contact an Experienced Georgia Bankruptcy Attorney Today
If you are considering bankruptcy, it is important to understand Georgia exemption laws and how they may apply to your situation you need to speak with an experienced bankruptcy attorney. The attorneys at Lankford & Moore Law can advise you what your best options may be and come up with a plan to get the outcome you need to get your finances back in order. Contact our office today to schedule a consultation.