What Are the Georgia Bankruptcy Exemptions?

Why Are Exemptions Important in Chapter 7 Bankruptcy?

Many people are under the false impression that filing bankruptcy means that you have to give up all your property. Creditors may have falsely told you this when trying to collect on your debt. But this simply isn’t true. Most people who file for bankruptcy get to keep all of their property, and they do so by claiming Georgia’s bankruptcy exemptions. Exemptions are laws that outline what types of property you can protect when you file a Chapter 7 bankruptcy case.

Exemptions ensure you can maintain a basic standard of living even after filing bankruptcy to get debt relief.

If this feels intimidating, don’t worry. You can get help during this process to make sure you protect what you own and get the debt relief you need. Take Upsolve’s quick screener to see if you qualify to use our free filing tool. Upsolve has helped over 13,000 people file bankruptcy successfully, and our services are completely free.

Does Georgia Allow You To Use Federal Bankruptcy Exemptions?

No. If you file Chapter 7 in Georgia and you’ve been a resident in the state for at least two years, you’ll be required to use the state bankruptcy exemptions.

Each state creates its own exemptions. The federal government also has a set of bankruptcy exemptions. The state ultimately decides whether you get to choose between the federal and state exemptions or if you must use the state’s. In Georgia, it’s the latter.

One exception to this rule is that you can use the federal non-bankruptcy exemptions to protect certain retirement accounts and disability benefits. 

To use the Georgia bankruptcy exemptions, you must be a Georgia resident for at least 730 days (two years) when your bankruptcy case is filed. Congress implemented this rule to stop filers from moving to a different state just to use more favorable exemptions. 

What Are Georgia’s Bankruptcy Exemptions?

Exemptions are laws that help you protect property in three major areas: 

• Real property, including your home or land you own

• Personal property, including household goods, tools of the trade, and your car

• Money benefits, including retirement accounts, wages, and other benefits

Real Property: Georgia’s Homestead Exemption

The homestead exemption in Georgia is $21,500. You can use this exemption to protect real estate (a home), personal property, or a co-op if you or your dependent use it as a primary residence. Georgia’s homestead exemption is doubled when both the person filing and their spouse have an interest in the home. 

The homestead exemption covers the equity you have in your home. Equity is calculated by subtracting what you owe on the home from its value. For example, if your home is worth $200,000 and you owe $180,000 on it, you have $20,000 of equity in the home. In this case, the homestead exemption would fully cover your equity in the home.

Source: Georgia Code 44-13-100(a)(1) & (a)(6), 44-13-1

Georgia’s Personal Property Exemptions

Georgia’s personal property exemptions cover a lot of different kinds of things. The law allows you to exempt up to $5,000 total for various types of personal property, but no single item can be valued at more than $300. This includes animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments, and health aids.

You can fully exempt a burial plot if you haven’t used the homestead exemption.

There is a $500 exemption for jewelry and a $1,500 exemption for tools of the trade, which include tools, books, and other supplies necessary for your profession.

Source: 44-33-100(a)(4), 44-13-100, 44-13-100(a)(3)

Motor Vehicle Exemption

Many people who are thinking about filing Chapter 7 are worried about losing their car. The motor vehicle exemption in Georgia allows you to protect a motor vehicle up to $5,000. Again, this number is referencing the equity you have in the car. To calculate your equity, take the current value of the car minus what you owe on it. The difference is the equity. 

For example, if your car is worth $10,000 and you owe $6,000 on it, you have $4,000 in equity. In this case, your car would be fully protected by the state exemption.

Source: Georgia Code 44-13-100(a)(3)

Georgia’s Wildcard Exemption

Georgia also has a wildcard exemption, which you can use to protect any personal property not otherwise covered by other exemptions. This exemption allows you to protect up to $1,200 in any property. Additionally, if you don’t use the full homestead exemption, you can apply up to $10,000 of the unused portion to protect personal property.

Source: Georgia Code 44-13-100(a)(6), 44-13-1

Money Benefits

Georgia fully exempts most types of monetary benefits, but some benefits, such as wages, are only exempt up to a certain amount

Fully Exempt

The following types of public assistance can be exempt up to the full monetary value:

• Workers' compensation

• Unemployment compensation

• Veterans' benefits

• Social Security

• Crime victims' compensation

• Local public assistance

• Old age assistance

• Aid to the blind

• Aid to the disabled

Georgia residents can use the federal non-bankruptcy exemptions to protect their retirement accounts up to the full amount. These accounts include:

• Tax-exempt retirement accounts:

• 401(k)s, 403(b)s, profit-sharing, and money purchase plans, SEP and SIMPLE IRAs, IRAs, Roth IRAs, ERISA-IRAs, and qualified benefits 

• Nonprofit corporations' employees; public employees; other pensions and IRA payments needed for support

Alimony and child support needed for support are both fully exempt.

Not Fully Exempt

Some money benefits can only be exempt up to a certain amount, including unmatured life insurance policy of up to $2,000 of equity and disability or health benefits up to $250 per month.

Your wages are also exempt up to a certain amount. You can keep up to 75% of earned unpaid weekly earnings or 40 times the minimum wage, whichever is higher. In some cases, the bankruptcy judge may choose to increase this amount.

Source: 11 U.S.C § 522 and Georgia Code §§ 33-29-15, 44-13-100, 18-4-20 

Need Help Filing Chapter 7 Bankruptcy in Georgia?

Exemptions are important because they ensure your property is protected when you file bankruptcy. Learning about them may feel complicated or confusing. Help is available if you need it. You can take Upsolve’s quick screener to see if you qualify to use our free filing tool. If you’re eligible, our tool helps you file your Chapter 7 case — including claiming exemptions — for free. We’ve helped over 13,000 filers through the process so far! And our services are always free.

If you’d prefer to speak with an experienced bankruptcy attorney, you can set up a free consultation with one near you. Many Chapter 7 filers can successfully file without an attorney, but if you’d like some extra help or you have specific concerns about expensive property you own that’s not covered by an exemption, it can be a good idea to speak with a professional.