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Bankruptcy: Georgia

Filing bankruptcy in Georgia gives honest debtors an opportunity to seek relief from overwhelming debt, and gives creditors an opportunity to recover some payments based on the value of the debtor’s property or dependability of earnings.  ­ 77,823 bankruptcies were filed in Georgia in 2010, ranking Georgia 2nd in the nation for the number of bankruptcy filings per capita. 53­% of Georgia’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.

Filing Bankruptcy in Georgia

Bankruptcy in Georgia is governed by federal law and all bankruptcy cases are initiated in the US Bankruptcy Courts in:

  • Georgia Middle District Court: Albany, Athens, Columbus, Macon, Thomasville, Valdosta
  • Georgia Northern District Court: Atlanta, Gainesville, Newnan, Rome
  • Georgia Southern District Court: Augusta, Brunswick, Dublin, Savannah, Statesboro, Waycoss

Although federal courts have exclusive jurisdiction over bankruptcy proceedings, Georgia law prohibits petitioners from choosing the exemptions listed in the U.S. bankruptcy code, requiring instead that debtors choose from the exemptions list under state law. With the guidance of a bankruptcy attorney Georgia petitioners can gain a full understanding of what personal property the state exemptions permit the petitioner to keep in bankruptcy, and what must be sold.

Chapter 7 Bankruptcy, Georgia

Chapter 7 bankruptcies in Georgia are the most common bankruptcy filing. Chapter 7 is preferable for petitioners who lack a significant amount of assets, such as investments and substantial equity in a home. This is because a Bankruptcy Trustee may liquidate personal property that isn’t protected by Georgia’s bankruptcy exemptions. Liquidation occurs when the Trustee converts personal assets to cash for distribution to creditors. Georgia’s Chapter 7 bankruptcy law allows petitioners to keep some essential property; the exempt assets are strictly off-limits to creditors looking for repayment.

The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.

Georgia Bankruptcy Exemptions

Georgia’s state laws designate specific property exemptions that allow debtors to keep certain personal property and assets in bankruptcy so they can start over as productive members of society.  Bankruptcy in Georgia permits debtors to choose exemptions from the state list.

Property exemption amounts are subject to change, and the most reliable source for exemption values is through a Georgia bankruptcy attorney.  Georgia bankruptcy exemptions include:

Georgia Homestead Exemption

  • $10,000: Real or personal property, including co-op, used as residence (Husband and wife may double)
  • $5,000 of unused portion of homestead may be applied to any property

Georgia Personal Property Exemption

  • $5,000 total, $300 per item: Animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments
  • $500 total: Jewelry
  • $3,500 total Motor vehicles
  • $7,500 total: Compensation for lost future earnings needed for support
  • Health aids
  • $10,000 total: Personal injury recoveries
  • Wrongful death recoveries needed for support
  • Burial plot, in lieu of homestead

Georgia Tools of the Trade Exemption

  • $1,500 total: Implements, books and tools of trade

Georgia Wage Garnishment Exemption

  • 75% of earned but unpaid weekly disposable earnings, or 40 times the state or federal hourly minimum wage, whichever is greater, for private and federal workers (Low-income debtors may be authorized for more)

Georgia Public Benefits Exemption

  • Social Security, local public assistance and old age assistance
  • Aid to blind and aid to disabled
  • Workers’ and Unemployment compensation
  • Veterans’ benefits
  • Crime victims’ compensation

Georgia Insurance Exemption

  • $250 per month: Disability or health benefits
  • Fraternal benefit society benefits
  • Annuity and endowment contract benefits
  • Group insurance
  • Proceeds of life insurance; Life insurance proceeds if policy owned by someone debtor is financially dependant on, proceeds needed for support
  • Proceeds and avails of industrial life insurance
  • Unmatured life insurance contract, dividends, interest, loan value, or cash value to $2,000 if beneficiary is debtor or debtor’s dependant

Georgia Pensions and Retirement Savings Exemption

  • Public employees and Employees of nonprofit corporations
  • ERISA-qualified benefits, IRAs and Payments from IRA necessary for support
  • Other pensions needed for support

Georgia Miscellaneous Exemption

  • Alimony, child support needed for support

Georgia Wild Card Exemption

  • $600: Any property
  • $5,000 total: Unused portion of homestead exemption

Chapter 13 Bankruptcy, Georgia

In 2010, 47% of debtors petitioned for protection under Chapter 13 bankruptcy laws in Georgia.  When a petitioner files Chapter 13 bankruptcy in Georgia, a court-appointed Trustee restructures the petitioner’s debts and designs a 3-5 year repayment plan, by which the debtor’s future earnings will be used to pay off creditors.  Chapter 13 petitioners in Georgia keep most – or all – of their property.

How to File Bankruptcy in Georgia

Eligibility for property exemptions ought to be a significant consideration in deciding if bankruptcy is a viable answer to your financial problems. The goal is to find a solution that will allow you to keep your major assets and qualify your debts for discharge.  Since every case is unique, a Georgia bankruptcy attorney can help debtors understand the facts of their financial situations and advise whether Chapter 7 or Chapter 13 bankruptcy are among the best options in their circumstances.

Bankruptcy Attorney: Georgia

It is the debtor’s obligation to know their privileges and duties as bankruptcy petitioners.  A Georgia bankruptcy attorney can interpret and break down the federal laws and state exemptions for those considering bankruptcy.  Due to the complexity and stressful nature of personal bankruptcy cases, the counsel and support of a trusted Georgia bankruptcy attorney is a worthwhile investment.