Understanding the Georgia Bankruptcy Exemptions
When it comes to bankruptcy, each state has specific bankruptcy exemptions that allow bankruptcy filers to protect certain assets when filing for bankruptcy. The Georgia bankruptcy exemptions, like most states, require that state exemptions be used.
To qualify for the Georgia bankruptcy exemptions, you must satisfy the residency requirements. If you don’t, then you have to use the exemptions of the state you previously resided in. Georgia, like its neighbor to the south, is divided into three districts: the Northern, Middle, and Southern Districts.
How Many Bankruptcies Were Filed in Georgia?
In Georgia’s Northern District, 9,637 Chapter 7 bankruptcies were filed versus 8,852 Chapter 13s. The Middle District had 1,710 Chapter 7 cases filed versus 4,233 Chapter 13 cases. The Southern District had 3,620 Chapter 7 filings, while Chapter 13 filings were 3,079. Now compare that to Florida.
In the Northern District of Florida, 1,535 Chapter 7 bankruptcies were filed, and 515 Chapter 13 cases. The Middle District, which is the largest district, had 21,094 bankruptcies filed, with 15,761 being Chapter 7 and 4,858 being Chapter 13. My former district, the Southern District, had 7,387 filings for Chapter 7 and 6,268 for Chapter 13.
These are the year-end figures for 2024.
Notice the difference between how many Chapter 13 cases were filed in Georgia versus Florida. Normally, by comparing the two chapters in bankruptcy, I can tell if the homestead protections are minimal, which is the case in Georgia, versus Florida, which has unlimited homestead protection.
The 730-Day Rule and the 180-Day Rule Determine if the Georgia Bankruptcy Exemptions Apply
There are two important dates to consider when determining if you can file for bankruptcy in Georgia. The first one is known as the 730-day rule. This means you must have lived in Georgia for at least 730 days to use the state exemptions. If you do not meet this residency requirement but have at least resided in Georgia for 91 days, you would apply the exemptions from your previous state of residence. This is known as the 180-day rule.
This is crucial because whether you are moving to or from Georgia, you need to evaluate which state offers better exemptions based on your specific situation. To learn more about exemptions under the Bankruptcy Code, see §522(b)(3)(A).)
Georgia’s Homestead Exemption
If you meet the 2-year residency requirement, you will apply the Georgia bankruptcy exemptions to your assets. Let’s start with the homestead exemption as an example.
Georgia’s homestead exemption is low, if not minimal, in my opinion. Georgia’s homestead exemption is $21,500 pursuant to O.C.G.A. § 44-13-100. For married couples filing jointly, the exemption is doubled.
To receive the homestead exemption for your primary residence, you must have owned the home for a total of 1,215 days. See Section 522 of the Bankruptcy Code.
O.C.G.A. § 44-13-100. In part, it reads as follows:
a) In lieu of the exemption provided in Code Section 44-13-1, any debtor who is a natural person may exempt, pursuant to this article, for purposes of bankruptcy, the following property:
(1) The debtor’s aggregate interest, not to exceed $21,500.00 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor. In the event title to property used for the exemption provided under this paragraph is in one of two spouses who is a debtor, the amount of the exemption hereunder shall be $43,000.00
Georgia’s state statutes can be found via this link.
Applying Georgia’s Bankruptcy Exemptions to Homestead Property
Per Zillow, the average home in Georgia is valued at $336,660. The average mortgage balance is $225,786. The difference between those two figures is $110,874, which is the home’s equity.
Applying the homestead exemption means subtracting $21,500 from the equity, leaving $89,374. That is the amount not protected or nonexempt. Now you can see why there are so many Chapter 13s filed, especially when compared to Florida, where the entire equity amount is protected.
Personal Property Exemptions
Georgia’s exemptions also include personal property. Household goods and furnishings are up to $300 per item, but with a maximum of $5,000.
(4) The debtor’s interest, not to exceed $300.00 in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor. The exemption of the debtor’s interest in the items contained in this paragraph shall not exceed $5,000.00 in total value;
See. O.C.G.A. § 44-13-100 (a)(4).
The Georgia Wildcard Exemption
Georgia offers what is known as an additional exemption, known as the Wildcard. The Georgia wildcard exemption allows you to protect an additional $1,200 on any property you choose. This includes a maximum of $10,000 of any unused portion of the homestead exemption to protect other assets.
Subsection (a)(6) states: “The debtor’s aggregate interest, not to exceed $1,200.00 in value plus any unused amount of the exemption, not to exceed $10,000.00, provided under paragraph (1) of this subsection, in any property.”
So this additional exemption provides protection to your other assets. See Georgia Code Title 44. Property § 44-13-100(a)(6).
Motor Vehicle Exemption
You can protect up to $5,000 in equity for a vehicle as seen above subsection 3 of § 44-13-100. To determine the value of your vehicle, you can use trusted sources such as Kelly’s Blue Book. If the appraisal seems high, consider taking your vehicle to a dealer for a written appraisal.
When applying the motor vehicle exemption, if there is nonexempt equity, in Chapter 7 cases, the maximum amount of time a trustee can extend payments on non-exempt assets is twelve months. However, bankruptcy trustees prefer a ten-month payment plan.
Note that Chapter 13 does offer what is known as a cramdown. The cramdown allows you to reduce the value of your vehicle to the fair market value. It could potentially save you thousands of dollars. Use the links below to learn more about the Chapter 13 cramdown.
- Maximize Savings with Chapter 13 Cramdown | Bankruptcy Blog
- YouTube: Pay Off Your Car Loan Faster with the Cramdown
The Tools of the Trade Exemption
Georgia also offers the tools of the trade exemption, which provides an additional $1,500 of protection to tools, equipment, or instruments necessary for your profession. For those in a trade like mechanics or landscapers, this exemption is critical. See subsection (a)(7).
Research! Research! Research!
As I go through each state, I have noticed errors every time. It’s common for law firms or attorney blogs to not be updated, including state websites. So, if you are filing bankruptcy without a lawyer, I suggest you triple and quadruple check the exemption amounts.
For information on the Georgia Bankruptcy Court System, follow this link. Contact information for the trustees in each district can be found via this link.
Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.
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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.
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