The Bankruptcy Code of the United States contains many provisions relating to the debtor’s ability to claim bankruptcy exemptions. Georgia, however, has its own set of bankruptcy exemptions. These are set forth in section 44-13-100 of the Official State Code of Georgia. These laws determine what types of property a debtor can keep after filing for bankruptcy. If a debtor owns real estate, a homestead exemption may be a viable option for them in bankruptcy.
The amount of property that a person can keep during a bankruptcy proceeding varies, but in general, a bankruptcy filing in Georgia will result in a stay on most collection attempts, foreclosure proceedings, and lawsuits filed by creditors. In addition to stopping collection actions, bankruptcy exemptions are also treated differently according to chapter, so creditors are usually paid the same amount no matter what chapter a person files under. For instance, if a person files under Chapter 7 in Georgia, they can keep a mortgage, a car, or retirement account.
During a bankruptcy filing, debtors in Georgia are allowed to keep their car. The state of Georgia has a car exemption that allows debtors to keep $3,500 of equity in one vehicle. A married co-filer may claim two cars, totaling up to $7,500. When calculating vehicle equity, a debtor subtracts the outstanding amount from the financed amount. If the vehicle is worth $12,000, however, the vehicle would qualify for the $3,500 exemption.
In Georgia, annuities are a common type of retirement vehicle, and they are exempt from the debtor’s bankruptcy estate. Moreover, many of these policies offer the same protection for the debtor’s assets, making them a smart choice for a debtor’s bankruptcy. And because Georgia law applies uniformly to all debtors, it is easy to see how it could help you avoid a bankruptcy.
One case that illustrates the importance of understanding the Georgia Bankruptcy Exemptions is Wallace v. McFarland. In that case, a debtor, who was a military veteran, was paying his spouse one payment from a mutual fund account. This one-time payment was a one-time payment to his wife, but he was not entitled to cash or any invasion of his principal.
Another important exception to bankruptcy exemptions is the retirement account balance. This is a crucial asset that should be protected in a bankruptcy filing. O.C.G.A. SS 44-13-100(a)(2.1) (C) protects the equity in a retirement account. In re Aliffi, the court ruled that a debtor can’t claim this exemption in a chapter 7 case because he had not shown that he had compensated for the value of his retirement account by making voluntary payments to it.