Navigating Georgia Bankruptcy Exemptions: A Comprehensive Guide by Cherney Law Firm

Do You Know about Georgia Bankruptcy Exemptions?


Do You Know about Georgia Bankruptcy ExemptionsThere are many issues people consider before filing for bankruptcy in Georgia. It is a challenging decision for many since it can have temporary and long-lasting effects on your credit. It may also affect your life socially. However, bankruptcy can also offer a financial fresh start if you are overwhelmed by debts.

Bankruptcy law protects debtors while also protecting creditors’ interests. Bankruptcy exemptions are a vital part of bankruptcy law. It helps to protect some of your most important assets from creditors. Understanding how bankruptcy exemptions work can help you to protect these significant assets.

Taking advantage of bankruptcy exemptions may be tricky if you need to learn how they work. An experienced bankruptcy attorney at Cherney Law Firm can help. We will help you file for bankruptcy, protect your exempt assets, and seek debt relief. 


Understanding Bankruptcy Exemptions in Georgia


Filing for Chapter 13 bankruptcy can help you reorganize your debts and develop a plan to repay your debts over time. Chapter 7 bankruptcy, on the other hand, can lead to liquidating your assets to pay off secured debts. Certain unsecured debts may also be discharged in Chapter 7.

Bankruptcy exemptions protect certain assets from liquidation. This means the bankruptcy trustee cannot sell the exempt assets to pay creditors. Therefore, these exemptions play a critical role for individuals seeking Chapter 7, and it is vital to understand how bankruptcy exemptions work.


Federal Bankruptcy Exemptions vs. Georgia Bankruptcy Exemptions

Bankruptcy laws are federal laws. Therefore, bankruptcy cases are filed in federal courts. In many states, debtors can choose to use federal or state exemptions. However, Georgia is an ‘opt-out’ state, meaning debtors can only use Georgia exemptions when filing for bankruptcy.


Types of Bankruptcy Exemptions in Georgia


Types of Bankruptcy Exemptions in GeorgiaA variety of assets are exempt under the Georgia bankruptcy exemptions, including motor vehicles, homestead, wages, personal property, public benefits, and others. The amount of these exemptions varies by the type. 


Motor Vehicle Exemption

You can use the motor vehicle exemption to protect your vehicle from liquidation. You may exempt up to $5,000 of equity in one or more cars. Therefore, if you have a $5,000 or less stake in your car, you can keep it. If you have to sell your car, $5,000 of the proceeds will be exempt.


Homestead Exemption

You may want to avoid losing your home when filing for bankruptcy. Under the Georgia homestead exemption, you can exempt up to $21,500 of equity in your primary residence. If you own the home as a couple, you may file a bankruptcy petition together, exempting up to $43,000 equity for your home.

The homestead exemption in bankruptcy is automatic. You do not need to file a homestead declaration to claim the exemption. You may keep or surrender the home to the bankruptcy trustee when filing Chapter 7 bankruptcy.


Wage Exemption

You can keep up to 75% of your disposable weekly earnings or 40 times the state or federal hourly minimum wage, whichever is greater.


Personal Property Exemption

You can use this exemption to protect household items. You may exempt property worth up to $5,000. Here are items you may exempt; remember each item should not exceed $300:

  • Clothes
  • Books
  • Crops
  • Furnishings
  • Household appliances
  • Musical instruments

You may also exempt jewelry not exceeding $500.


Pension and Retirement Exemption

Federal law allows you to keep your tax-exempt retirement plans in case of bankruptcy. Retirement plans such as 401(K)s, 403(b)s, and traditional and Roth IRAs fall into this category. 

Ask your attorney whether your retirement accounts qualify as tax-exempt retirement accounts. If they do not, you can explore other exemption options, such as wildcard exemption.


Public Benefit Exemptions

You may exempt the following benefits in full:

  • Social Security benefits
  • Unemployment compensation
  • Disability benefits
  • Veterans benefits
  • Old age assistance
  • Crime victims’ compensation


Tools of the Trade Exemption

You can exempt up to $1,500 worth of the tools you use to pursue a trade or source of livelihood.


Wildcard Exemption 

You can use the wildcard exemption to exempt any asset you choose. However, it should be at most $1,200 in value. You can also use up to $10,000 of the unused portion of a homestead exemption to protect another asset. 


Insurance Benefits Exemptions

You can protect the following insurance benefits during bankruptcy:

  • Group life insurance
  • Unmatured life insurance contract
  • Proceeds of a life insurance policy to a beneficiary of the policyholder
  • Avails and proceeds of industrial life insurance

Ask your attorney how to protect your life insurance benefits through bankruptcy exemptions.


Other Georgia Bankruptcy Exemptions

Here are other Georgia bankruptcy exemptions you may use:

  • $7,500 of compensation for future earnings
  • Professionally prescribed health aids
  • Wrongful death recoveries needed for support
  • Alimony and child support
  • Up to $10,000 of personal injury recoveries

You may talk to us about choosing suitable exemptions to save more assets.


How Can Bankruptcy Exemptions Affect Your Bankruptcy Case?

Depending on your situation, you can risk losing several assets. However, bankruptcy exemptions allow you to protect some assets. A bankruptcy trustee cannot sell the exempted assets to pay any creditors. It is also possible for your case to be classified as a no-asset bankruptcy. 


Navigating Bankruptcy Exemptions


Navigating Bankruptcy ExemptionsWhen choosing an appropriate debt solution, evaluating your assets, debts, and available options is essential. This can help you understand what exemptions apply to your situation and what you may stand at risk of losing. Understanding what is important to you and your goals is essential to make these decisions. 


Assessing Your Assets

Knowing your assets’ value before applying for a bankruptcy exemption is vital. You can have your assets and properties appraised so you know their current market value. This can also help your attorney determine whether bankruptcy is appropriate, what alternatives are available, and what exemptions apply to your case. 


Legal Considerations and Challenges

One challenge you may face is choosing a suitable exemption. Collecting the correct exemption forms and documentation is also vital for your case. 

If a mistake occurs while filing for a bankruptcy exemption, you will need to discuss and resolve that issue with the bankruptcy trustee and creditors. Providing false information to hide assets is fraud and can land you in legal trouble.


Filing for Bankruptcy in Georgia? Cherney Law Firm Can Help


If you have questions about Georgia bankruptcy exemptions, we have answers. At Cherney Law, we understand how stressful filing for bankruptcy can be. Understanding the bankruptcy exemptions and how to use them can be confusing.

We represent bankruptcy clients in Marietta, Georgia, and the surrounding area. Attorney Cherney will take the time to explain how the federal bankruptcy code and Georgia law apply to your case. 

Contact us today and schedule a free consultation! We can guide you through each step of the bankruptcy process.

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