Bankruptcy is designed to give troubled debtors a fresh start. One of the ways it does that is by allowing debtors to hold onto some of their most valued and necessary possessions. Known as exempt assets, they are not included in the bankruptcy estate and cannot be sold or repossessed by a lender to cover debts. The rationale for these exemptions is that a debtor shouldn’t be left without basic needs such as shelter, clothing, transportation and tools of his or her trade.
In some states, debtors can opt to use exemptions provided in federal bankruptcy law. However, Georgia residents must use the state’s list of exemptions. Two commonly used ones are:
- The homestead exemption — This allows an individual to protect up to $21,500 of the property that he or she, or a dependent, uses as a residence. The homestead exemption is $43,000 for a married couple when they file a joint petition for bankruptcy. If the equity on your residence is less than the maximum homestead exemption to which you are entitled, you can use up to $10,000 of the remaining exemption to protect other property.
- The wildcard exemption — This protects up to $1,200 worth of property of the debtor’s choosing, along with any leftover value from the homestead exemption not to exceed $10,000.
The wildcard exemption is so named because it provides flexibility. It may be used to cover cash assets or to augment other exemptions, thereby protecting property that might otherwise be included in the bankruptcy estate. For example, Georgia allows for an exemption of up to $5,000 in motor vehicles and another $5,000 in household furnishings and other personal items (with each piece not to exceed $300 in value). An added $1,200 through the wildcard exemption can make the difference between keeping an important piece of property or or it being sold.
The attorneys at Jeff Field & Associates are prepared to help you utilize the full scope of exemptions made available by Georgia law and find other solutions that can help you move forward with your life. For assistance determining if bankruptcy is the right move for you, schedule a free initial consultation with a member of our team. Call 404-381-1278 or contact us online to make an appointment. Our offices are located in Scottdale, Marietta, Gainesville, Douglasville, Lawrenceville and Athens.