One of the most common misconceptions about bankruptcy is that it requires you to turn over and sell everything you own to get a discharge of your debts. However, in addition to the fact that liquidation bankruptcy under Chapter 7 is only one of several types of bankruptcy available to individuals and businesses, even under Chapter 7, a typical individual can keep a significant amount of property.
While bankruptcy is a federal program, individual states are permitted to pass their own laws setting what property a bankruptcy filer may keep. In some states, filers may choose between their state’s exemptions and those available under the federal bankruptcy code. In Georgia, however, the exemptions provided under state law are your only option:
- Up to $21,500 in real estate or personal property
- Up to $3,500 in equity in a vehicle
- Up to $500 in jewelry
- Up to $5,000 in other personal items as long as no individual item is worth more than $300
- Up to $10,000 in personal injury proceeds
- Up to $1,500 in trade tools
- Alimony and child support
- Public benefits
- Certain retirement assets and life insurance proceeds
It’s easy to see that these exemptions are fairly extensive. What’s more, Georgia allows married couples to pool exemptions, doubling many of these numbers. For instance, a married couple holding joint title to a home can keep up to $43,000 in equity. This is why bankruptcy does not affect many people’s lives nearly as much as they expect. Still, it is important to consult an experienced Georgia bankruptcy attorney to assess how these exemptions apply to you and whether bankruptcy is your best option.