Bankruptcy is a legal procedure designed to achieve relief for individuals or businesses that owe their creditors money. The ultimate goal of bankruptcy is to allow debtors to restructure their debt agreements, reduce the amount they are owed, or in some cases, eliminate part or all their debt. While bankruptcy can represent a clean slate to someone struggling to meet their debt obligations, bankruptcy can be an expensive and long process with many different payment variables.

Bankruptcy exemptions properties are select laws that protect your property in bankruptcy. Exemption laws exist within the state and federal bankruptcy code.The exemptions contained in state law vary depending on the jurisdiction and will often protect your property from creditors even if no bankruptcy case is filed. Exempt property cannot be sold for the benefit of your unsecured creditors. 

However, if you want to protect your property, you have to claim an appropriate bankruptcy exemption when filing your bankruptcy petition. If you don’t claim any exemptions, or you claim the wrong exemption, the property will not be protected from bankruptcy. This is why it’s so important to consult a bankruptcy lawyer before making any large decisions about the bankruptcy process.

The bankruptcy chapter you choose to file will determine what will happen to any property that is not exempt. If you file a Chapter 7 bankruptcy, the bankruptcy trustee will sell any non-exempt property and distribute the proceeds to the creditors. In contrast, if filing a Chapter 13 bankruptcy you will be able to keep everything you own, but you will have a repayment plan to pay back creditors. 

Listed below are the most common bankruptcy exemptions in Georgia:

  • Homestead Exemption-The state of Georgia allows for an exemption of up to $21,500 per person or $43,000 if filed by a married couple together.That amount goes to the equity held in the house. For example, if married spouses file for Chapter 7 bankruptcy and own a home worth $100,00 they will need to claim the full equity of the house. 
  • Motor Vehicle Exemption In Georgia, the motor vehicle exemption is up to $5,000 in equity. This means if the vehicle owned is less then $5,000 they will be exempt from that value. This is a disadvantage if you have a pricier vehicle because the vehicle that is expensive may not get all the value exempt. 
  • Personal Property Exemption– The personal property exemption in Georgia is set at $5,000, which is considered a large amount among state bankruptcy laws. Most items of personal property  depreciate in value are not worth very much in terms of resale value. Still, some personal belongings may command high rates on the open market. Personal property would be an example of a type of exempt property. As stated above, personal property is anything that is not real estate. Personal property can be art, electronics, recreational items, or furniture. Other personal property exemptions include, If applying the homestead exemption, any type of real estate would fit under this exemption category including someone’s personal residence.
  • Pension and retirement accounts– Qualified pension and retirement accounts with a value of up to $1,171,150 are protected.
  • Child support & alimony– Alimony and child support that is  needed for support.
  • Tools of trade– Books, equipment, inventory and tools that are needed to earn a living are exempt.
  • Exemption for wages– Either a minimum 75% of earned but unpaid earnings or 30 times the state or federal hourly minimum wage depending on  whichever is greater. The court could authorize more for lower income filers.
  • Insurance exemption– Disability, health or accident insurance policies remain are an exemption and you retain policy equity.
  • Public benefits-Unemployment, workers comp, social security and public assistance benefits are exempt.

How Does the Bankruptcy Wildcard Exemption Work in Georgia?

The federal bankruptcy code has a list of exemptions; however, some states like Georgia do not use these federal exemptions. Instead, they use their own code and their own state exemptions. For example, Georgia, like many other states, uses their own state exemptions. The exemptions contained in state law vary based on the jurisdiction and will often protect your property from creditors even if no bankruptcy case is filed.

Georgia law requires that state bankruptcy exemptions be used because the state has chosen not to use federal exemptions. However, the amounts listed may be higher if filing bankruptcy as a married couple. If you are looking for more information on how to file bankruptcy in Georgia, you should consult an attorney.

Although the name may sound strange, the wildcard exemption simply gives bankruptcy filers another opportunity to protect their assets. Georgia allows up to $10,000 in leftover equity money that is unused from the homestead exemption to be put toward another exemption. Additionally, it provides $1,200 to protect anything else. If added up that is about $1,200 in total exemptions.

How popular is a full wildcard exemption? This depends on each individual’s situation. Moreover, a large number of Chapter 7 bankruptcy filers decide not to hold onto their homes or have minimal equity in the real estate property they own or they do not own any real estate at all. In conclusion, they can use the $10,000 plus $1,200 wildcard exemption to protect themselves in other areas.

What Other Types of Legal Issues Can Arise in a Bankruptcy Filing?

Even though bankruptcy has many advantages as stated in the section above, it also has repercussions that can negatively affect your lifestyle and your long term financial situation. Because of the list of disadvantages, you should think hard about filing for bankruptcy and whether it is the right thing for you to do. Different problems like employers knowing of your bankruptcy can be a downside of filing for bankruptcy.

Do I Need a Georgia Bankruptcy Lawyer?

For some, filing for bankruptcy is a cure to financial problems but could depend on your situation, the type of debts you have, and how much of your assets you need to protect. If you are considering bankruptcy, and have questions about your bankruptcy exemptions in Georgia, you should consider discussing your options with an experienced Georgia bankruptcy lawyer

While it is possible to represent yourself in court, the majority of people who file for bankruptcy in the United States do so with the assistance of an attorney. There are several different types of bankruptcies, and rules that go along with each one. Therefore, having a knowledgeable bankruptcy attorney will be an invaluable resource. 

Furthermore, because filing for bankruptcy exemptions are complex legal matters, finding the right bankruptcy attorney is very important. A bankruptcy attorney can help you decide whether or not to file for bankruptcy, and what type of bankruptcy you should file. 

If you decide to file for bankruptcy, a bankruptcy attorney can help ensure that your property is protected, all of your dischargeable debts are discharged, and your creditors do not violate your rights. A bankruptcy attorney will also give you additional details on what exemptions you may be entitled to and ensure you are on the right path to financial recovery.