If you have been considering filing for bankruptcy, you are likely wondering what assets you will be able to keep. That is where state and federal exemptions come in to play. An exemption rule is one that allows for the debtor to keep some property even when claiming to be insolvent. This means, in layman’s terms, that you may be able to keep some of your assets if they fall under an exemption law.
Georgia Law and Property Exemptions
Georgia state law is specific when it comes to exempt assets. Below are some of the most common assets that people question when considering bankruptcy:
- Motor Vehicle Exemptions: Georgia law states that anyone filing for bankruptcy can claim any number of vehicles as long as their combined value is less than $5,000 for one person filing bankruptcy, or $10,000 for married, filing joint debtors. Often this value is enough to protect at least one vehicle, depending on the value of the car. If there is a loan on the vehicle, the trustee for the bankruptcy will take into consideration the value of the vehicle and the amount of the loan. If the vehicle value is less than $5,000, the vehicle will stay protected. However, if the vehicle is worth more than $5,000 in equity, the trustee will look more deeply into the situation. The as-is cash value will have to be determined. As-is vehicles typically need repairs and reconditioning to be sold for a certain value. This is the value that the trustee will consider when determining if the vehicle is protected.
- House Exemptions: When filing for bankruptcy, many people worry that they will lose their house, and this is a legitimate concern. If you own your home outright or the equity of your home is above the exemption amount of $21,500 allowed by the state, it may not be protected. If you are filing for bankruptcy jointly, the value of your home cannot be over $43,000. Just like with vehicle exemptions, the bankruptcy trustee will determine the cash value of your home. This may be as little as 60% of the fair market value of your home. This may be all that a cash buyer would offer.
- Wage and Annuity Exemptions: When filing for a Chapter 7 bankruptcy, it is considered a fluid process. This means that you may be allowed to have some cash in the bank. By Georgia laws, 75% of the debtor’s wages will be exempt. Your checking and savings accounts will be protected for up to 75% of their value. When it comes to retirement accounts such as 401(k)s and IRAs, these are fully protected from bankruptcy. Other benefits such as workers’ compensation, veteran’s benefits, unemployment benefits, or disability payments are also exempt.
Contact an Experienced Bankruptcy Attorney Today
When it comes to filing for bankruptcy it is important to know how it will affect you and your assets, which is why you should not make any decisions without consulting with an attorney. The attorneys at Lankford & Moore Law have years of experience helping clients just like you. Contact us today to schedule a consultation.