Georgia Bankruptcy Exemptions Explained
What are the Georgia Bankruptcy Exemptions?
The Georgia bankruptcy exemptions help you keep certain property when you file. Unlike some other states, Georgia requires you to use the state exemptions. You don’t have the option to claim the federal bankruptcy exemptions.
How Do Exemptions Work?
When you file for Chapter 7 bankruptcy, one of the biggest questions is whether or not you will be able to keep your property.
That depends on which property exemptions you can use on your bankruptcy forms. They are called exemptions because they “exempt” -- or “excuse” -- certain property from being taken. In most cases, exemptions protect most day-to-day items that you own, unless you have expensive property like a house or a car.
Certain exemptions protect entire categories of property like retirements accounts, regardless of value. Other exemptions only protect specific property like a vehicle up to a certain value.
There are two types of exemptions: Georgia bankruptcy exemptions for the state and the federal bankruptcy exemptions.
Every state has its own set of property exemptions. And some states also allow you choose between their exemptions and a set of federal bankruptcy exemptions. When they do, they will generally let you to choose the system that is the best fit for you.
Although some states allow you to use the federal bankruptcy exemptions, others do not. Georgia does not recognize the federal exemptions.
This means that you don’t have the option to use the federal bankruptcy exemptions. You can only use Georgia bankruptcy exemptions.
So, there are a few main things to keep in mind:
If you don’t own a home, the Wildcard Exemption helps you keep more property.
Federal Nonbankruptcy Exemptions
This article will help you understand some of the ways Georgia's bankruptcy exemptions work and the things to keep in mind when filing in Georgia.
First things first. . .
The Residency Requirement
Before settling on the Georgia bankruptcy exemptions, it’s important to be sure that you meet the residency requirements.
You are required to have lived in Georgia for at least the past 2 years (720 days before filing) to use that state’s exemptions.
What if you haven’t lived in Georgia for the past 2 years? Then, you use the exemptions from the state you resided in for the majority of the 6 month period prior to 2 years ago.
For example, I am filing for bankruptcy in New York today where I live. But until I moved to New York last year, I lived in Vermont for my entire life. When I file for bankruptcy, I need to use Vermont exemptions.
Now that you’ve figured out which state exemptions apply to you, let’s discuss how they might compare to the federal exemptions.
If you don’t own a home, the Wildcard Exemption helps you keep more property.
Do you have a lot of stuff? If you don’t need the Homestead Exemption, Georgia allows you to increase the amount of personal property you can protect. Normally you can protect $1,000. But, if you don’t own a home, you can use the Wildcard Exemption to protect up to $10,000.
This becomes important if you have items that don’t quite fit into certain categories. Or, if the value of some of your property is over the amount the court lets you protect.
So, how does this work exactly?
Maybe you realize that you want to protect more than $1,000 of personal property. Things like extra books, TVs, clothes, etc. If this is the case, you can use the personal property exemption for $1,000 worth of stuff and then list the wildcard exemption for the rest of the items from $1,001 - $4,000 in value.
Maybe your car has $2,200 in equity and you’re frustrated because the Motor Vehicle Exemption only lets you protect up to $1,000.
If you’re not using the Homestead Exemption, you can use the Wildcard Exemption to protect the other $1,200 difference!
If you’re not using the Homestead Exemption, Georgia’s Wildcard Bankruptcy Exemption will help you keep up to $10,000 in property.
Georgia Accepts Federal Nonbankruptcy Exemptions
Although you are limited to Georgia’s bankruptcy exemptions, there are certain instances where you can claim other federal exemptions that aren’t related to the bankruptcy code. These are called the federal nonbankruptcy exemptions.
You can use the federal nonbankruptcy exemptions if you belong to a specific group of people or work in a particular profession. These exemptions can be applied if you have special circumstances with:
- Retirement benefits,
- Death or disability benefits, or
- Survivor’s benefits.
Some of the professions it applies to are:
- Military service members
- Government employees
- Railroad Workers and
- Individuals who receive Social Security
It’s important to know whether or not these special cases apply to you. If you’re eligible, the federal nonbankruptcy exemptions can help you protect property that otherwise wouldn’t be protected under Georgia’s bankruptcy exemptions.
What Do the Georgia Bankruptcy Exemptions Cover?
$21,500 in equity; any left over amount up to $10,000 can be applied to the Wildcard Exemption; Couples can exempt up to $43,000 is one spouse owns the property. What It Covers: This exemption is important for homeowners. It covers real property such as family homes, co-ops, mobile homes, burial plots, etc.
Motor Vehicles Amount: Up to $5,000 in equity. What It Covers: If your car has less than $5,000 in equity, Georgia’s motor vehicle exemption can help you keep your car during Chapter 7. This is only allowed if your payments are up to date. If you’ve paid more than that on your car, it might not be protected when you file.
What It Covers:
Georgia’s bankruptcy exemption for personal property covers most of your day-to-day items:
Amount: Up to $5,000
What It Covers: This Georgia bankruptcy exemption covers personal items such as animals, crops, clothing, appliances, books, furnishings, and musical instruments
Jewelry Amount: $500 What It Covers: This Georgia bankruptcy exemption covers all types of accessories including rings, necklaces, earrings, etc. It is important to note that is not limited to real or very expensive pieces. This exemption also applies to inexpensive costume jewelry.
Health Aids: What It Covers: The Georgia bankruptcy exemption for health aid includes items where the sole purpose is to assist you in maintaining your health and quality of life. This often includes things like prosthetic or orthopedic equipment. What It Doesn’t Cover: Keep in mind that health aid equipment does not include anything that you could also use for recreational purposes. So, things like massage chairs would not be protected.
Lost Earning Payment Amount: $7,500 What It Covers: This Georgia bankruptcy exemption covers payments that you’ve received for loss of future earnings or wages. It is important to note that this is viewed separately from the personal injury exemption above.
Wrongful Death Recovery What It Covers: This Georgia bankruptcy exemption for “wrongful death” federal allows you to protect payments that you received for the death of someone you depended on such as a spouse.
Personal Injury Recovery Amount: $10,000 What It Covers: This Georgia bankruptcy exemption for personal injury covers any money that you received for harm, loss of future earnings, or if you were the victim of a crime.
Alimony & Child Support Amount: $7,500 What It Covers: The Georgia bankruptcy exemption covers the amount that you recieve for alimony or child support from a former partner or spouse. What It Doesn’t Cover: Be careful not to confuse this with money that you may pay in domestic support. This only applies if you are the recipient of support not the payer.
Public Benefits / Government Assistance What It Covers: This Georgia bankruptcy exemption covers different types of public benefits or government assistance. This includes: Unemployment compensation, Social Security benefits, and public assistance, Workers compensation, Veteran’s benefits, Old age assistance, Aid to blind persons, Aid to disabled persons and Crime victims' compensation
Burial Plot (Only if you don’t use the Homestead Exemption) Amount: No amount listed.
Wages Amount: Minimum 75% of earned but unpaid wages for private and federal workers; bankruptcy judge may authorize more for low-income debtors.
Pensions What It Covers: This Georgia bankruptcy exemption covers employee pensions for employees of a non-profit, ERISA-qualified benefits, Public employees, and other pensions needed for support.
*Tools of Trade** Amount: Up to $500. What It Covers: The Georgia bankruptcy exemption for tools of trade covers equipment that you need for your business or livelihood. This could include tools, factory equipment, and business vehicles. The item must be necessary to your specific trade or job in order to be exempt.
Insurance Amount: $250/month for disability or health benefits; Up to $2000 for unmatured life insurance dividends, interest, loan value or cash value (if you are either the beneficiary or the dependent of the beneficiary). What It Covers: The Georgia bankruptcy exemption for insurance includes different types of insurance such as: accident insurance, unmatured life insurance policy, disability benefits, illness benefits, unemployment, life insurance from someone who you were a dependent of, and life insurance.
*Wildcard** Amount: Up to $400 of any property; any left over amount of the Homestead Exemption up to $10,000 can be applied to the Wildcard Exemption.
What It Covers: This Georgia bankruptcy exemption is particularly important for people who don’t own homes. If you have more than $1,000 worth of property but don’t own a home, you can increase your Wildcard exemption allowance up to $10,000.
When you’re filing for Chapter 7 bankruptcy, Georgia does not give you the option to use the federal bankruptcy exemptions. Assuming you meet the residency requirements, you are required to use Georgia's alone. When thinking about how the exemptions can work for you, the main thing to keep in mind is Georgia’s Wildcard Exemption.
Georgia’s Wildcard Exemption can help you keep more stuff. This is important to consider if you don’t own a home but would like to protect more than $5,000 of personal property.
When you’re filing for Chapter 7 bankruptcy, the Georgia bankruptcy exemptions can help you keep most of the property that you own.
Chapter 7 bankruptcy is a powerful social safety net. By erasing your debts and using the property exemptions to protect your stuff, you will be well on your way to a fresh start.