How Much Property Can I Protect When I File Bankruptcy In Atlanta, Georgia
When you file Chapter 7 or Chapter 13 in Atlanta, Georgia, it is most likely that you can protect most or all of your property. Most people who file bankruptcy in Georgia are able to keep their homes, cars, bank accounts, and retirement accounts with no problems. When you consult with a Georgia bankruptcy attorney, the attorney will look at the list of your assets and let you know what type of bankruptcy is best for you.
Keeping Property When You File Chapter 7 Bankruptcy in Georgia
In a Chapter 7 bankruptcy case in Georgia, you are allowed a certain number of “exemptions” or protections on your personal property. Popular exemptions are:
1. $21,500.00.00 Homestead Exemption: This Georgia exemption protects equity in the house where you live up to $21,500.00 per individual and $43,000.00 for a joint bankruptcy filing. Georgia Code Section 44-13-100(a)(1). In this economy and housing market, most people do not use their homestead exemptions because they owe more money on their mortgages than their homes are worth.
2. $600.00 “Wild Card” Exemption: This exemption can be applied to any property. Most people use this exemption on their checking accounts. Plus, if you don’t use your homestead exemption, you can take up to $5,000.00 of the homestead exemption as a “wild card.” Georgia Code Section 44-13-100(a)(6).
3. $3,500.00 Vehicle Exemption: This exemption can be applied to your vehicle. Most people owe money on their cars so this is sufficient to cover any equity. Georgia Code Section 44-13-100(a)(3). However, if you do happen to own your vehicle outright and it is worth more than $3,500.00, you can use the wild card exemption to help you fully protect your car in a Georgia Chapter 7 bankruptcy case.
4. Unlimited Retirement Exemption: This exemption can be applied to most 401(k) plans and IRAs and protect the entire retirement accounts so long as you keep them in the retirement accounts. Georgia Code Section 44-13-100(a)(2.1). You never want to liquidate or cash out a retirement account before you file bankruptcy!
5. $5,000.00 Household Goods Exemption: This exemption applies to household items and furniture. Georgia Code Section 44-13-100(a)(4). Since you should use garage sale value for these assets, most people do not own any furniture or household goods that are worth more than the amount provided in this Georgia exemption.
6. $500.00 Jewelry Exemption: This exemption on jewelry is usually sufficient for most people’s wedding bands and costume jewelry. Georgia Code Section 44-13-100(a)(5). However, if you have jewelry that is worth more than the allowable exemption, you can use whatever available wild card exemption you had.
Can I File Bankruptcy in Georgia if My Property is Worth More Than the Available Bankruptcy Exemptions?
If you do have some valuable assets, such as a car or home with equity, you will be able to keep that property in bankruptcy if you file a Chapter 13 bankruptcy in Georgia. In Chapter 13, you repay unsecured debts equal to the amount of the unprotected equity in your property. For example, if you own a car outright that is worth $20,000.00 and you apply a car exemption of $3,500.00 and a $5,600.00 wild card exemption for a total of $9,100.00, you will have $10,900.00 of the car’s value that is unprotected. Thus, you must repay at least $10,900.00 of unsecured debt in order to keep the car. Repayment of debts in a Chapter 13 case is done over the course of three to five years with no interest and late fees.
For more information on protecting property in a Georgia bankruptcy, please call the Law Offices of Charles Clapp at 404.585.0040 for a free consultation.