When you are filing for bankruptcy, or even if you are simply struggling with your monthly bills and wondering whether you’re going to continue to be able to make ends meet, the questions abound. One of these is probably whether or not you’ll be able to keep your home or other property if things go south.

The United States Bankruptcy Code provides exceptions for what can be seized by creditors. This includes intangible, personal, and real property, essentially allowing for these things to be excluded from a debtor’s estate when creditors come calling. The debtor simply has to list their particular assets as exempt under the code and they cannot be seized.

Determining what is exempt and what is not, though, can be quite tricky. It’s always in your best interest to hire an experienced, professional bankruptcy lawyer such as those at Morgan & Morgan. This way, you know your Georgia bankruptcy petition will have everything taken care of down to the letter and you can rest easy in your home while you get your finances back on track. Your bankruptcy lawyer can also help you file the motions to avoid certain types of liens or security holds being placed on your property, even after your discharge is active.

Federal Non-bankruptcy Exemptions

Even if you don’t file for bankruptcy, you have certain property rights that are protected from creditors. If you live in Georgia, your home cannot be taken from you. However, creditors can put a judgment lien against your property. This is a legal proceeding, meaning that a judgment must be entered by the court. Typically, this is a settlement from the court or a verdict demanding payment for the home. A judgment lien helps creditors protect their financial interests in the home.

So, what is the point of a judgment lien? It basically means that the creditors can’t take your home unless you sell or refinance. They can’t actually take the tangible property, but they can take the proceeds from a home sale or the yields that come from refinancing. In other words, the bank or lender has a hold on the value of the home, not the actual walls.

However, even if you do sell or refinance in Georgia, you can enact the Homestead exemption which allows you to retain up to $21,500 of your equity—or double that if both your and your spouse’s names are on the deed.

These judgment liens are able to be enforced for up to seven years, even if the property changes from one family member to another. If you want to sell or refinance before the seven years are up and the lien expires, you are responsible for paying off the lien and getting it removed by the court. You also have the option to file a Chapter 7 or a Chapter 13 bankruptcy to reorganize your debts and create a plan to pay them off.

Although a creditor cannot take your home in Georgia, having a judgment lien up against your home (or for other debts) is no fun, either. Judgment liens can be filed against you and attached to both real estate and other personal property. Creditors can also garnish your wages, place holds on or take any money deposited into your checking account, or repossess your car. This can happen even if you have paid off your car or other property! For example, let’s say you stop paying your credit card bills. Georgia law allows creditors to put liens against your property that can sit for years. Then, out of nowhere, they can come and take away certain pieces of property even if you own them fair and square. So, oftentimes it would behoove you to file a Chapter 7 or a Chapter 13 bankruptcy, which protects you and your assets under the Georgia state bankruptcy code.

If a lien is going to be attached to real estate specifically, the creditor will file with the superior court clerk in the county where the debtor resides, or where the real estate is. If the lien is on personal property, the lien will be taken out specifically in the county of residence. These liens do have limits: a certain amount of your property is protected, just like with the bankruptcy exemptions (explained in further detail below), but to be on the safe side you should always talk with a Georgia bankruptcy attorney who can go over all your options with you and make sure you are choosing the path that can protect the most of your assets.

Bankruptcy-Specific Situations

If you talk to a creditor before you talk to a bankruptcy lawyer, remember that the creditor is out to serve one party: themselves. So obviously, they’ll tell you that you have to give up your property to them so that your debt can be forgiven. Your bankruptcy lawyer will be able to give you the truth about starting over with a Chapter 7 bankruptcy or making a plan to pay back your debts over time with a Chapter 13.

When you file for bankruptcy, you are trying to get a fresh start. If you don’t have a home to sleep in or a car to drive to get to work, how will you begin again? That’s why federal law has loopholes and stipulations that allow you to keep certain types of property and assets, even when your financial situation is in need of a do-over.

Georgia bankruptcy law, however, doesn’t allow you to use federal exemptions; you are only allowed to use those set forth by the state. You can use the federal non-bankruptcy exemptions, though, to protect your Georgian retirement accounts and disability benefits.

In order to use the exemptions set forth by Georgia state law, you have to have lived within the state for two years before filing. This is because many bankruptcy petitioners would try and move to the state that benefitted them the most before filing, and then move out afterward. You can still file for bankruptcy in Georgia if you’ve lived there for at least 180 days, but you can’t use their exemptions and will be held to those of your previous state.

The Homestead Exemption

The particular Georgia bankruptcy exemption that allows you to keep your home is called the Homestead exemption. This keeps your property safe from being seized by creditors and by the bankruptcy trustee, as long as you don’t have over $21,500 of equity in your home. This number is doubled to $43,000 if you are married and filing a joint bankruptcy petition with your spouse (both names must be on the home deed).

This amount doesn’t necessarily have to be just your home, either. It can also be used to save personal property or a co-op if you or your dependents use it as your main residence. For example, if your children live in your RV on the side of your property, this could be saved under the Homestead exemption.

Wildcard Exemption

Even if the personal property isn’t used as the primary residence, it can be protected as long as there is less than $10,000 in equity in the property. This particular loophole is known as the Wildcard exemption because it can be used for any type of property, not just real property. For example, the Wildcard exemption can be used for:

• Jewelry (up to $500)
• Animals, appliances, books, burial plots, clothing, crops, furnishings, health aids, home goods, and/or musical instruments (up to $5,000 total, with the value of each item not to exceed $300)
  • Burial plots may only be used in this exemption if the Homestead exemption is not also used.
• Motor vehicles (up to $5,000)
• Tools of a trade (up to $1,500)

Additional Exemptions

Georgia also has allowances for intangible property, such as earned wages, retirement accounts, and money benefits.

• Wages (up to 75% of weekly unpaid earnings)
  • These can often be waived for low-income workers. If 75% of your wages are still less than 40x the accepted minimum wage amount, then you will be able to keep all of your wages.
• Retirement plans (up to the full value)
  • Tax exempt accounts
  • 401(k)s, 403(b)s, ERISA-IRAs, money purchase plans, profit-sharing plans, IRAs, Roth IRAs, SEPs, Simple IRAs, and qualified benefits
  • Payments needed to support nonprofit corporations’ or public employees, as well as pensions and IRA payments
• Money benefits
  • Public assistance, such as crime victim’s compensation, local public assistance, social security, unemployment, veteran’s benefits, and worker’s comp
  • Old age, blind, and disabled assistance (up to $250/month)
  • Life insurance plans, as long as they are unmatured and under $2,000
  • Alimony and/or child support is fully exempt for the maximum amount.

Call Today For A Free Consultation From An Experienced Bankruptcy Lawyer at Morgan & Morgan

Certain types of real estate and personal property are protected by Georgia state laws, whether the debtor is filing for bankruptcy or not. However, these situations are quite tricky to navigate. Sometimes, filing for bankruptcy is in the debtor’s best interest and sometimes it isn’t necessary. There have been many debtors, though, who think that they can work through these proceedings on their own or that they are safe because they haven’t “heard” from a creditor in a while, and then they are taken by quite the negative surprise.

Don’t let this happen to you! Reach out to Morgan & Morgan and speak to our empathetic, experienced bankruptcy lawyer. Our team will help you sort out your situation to ensure that you are safe in your home and with the property and/or assets that are most important to you. Bankruptcy or financial struggle doesn’t have to mean losing everything you hold dear. Let us help you get back on the right track with something to show for it at the end.

Christopher Ross Morgan

Christopher Ross Morgan

Christopher Ross Morgan focuses on bankruptcy cases, specifically Chapter 7 and Chapter 13 cases. Christopher also takes on Disability and Workers’ Compensation cases. As one of the most accomplished Chapter 7 and Chapter 13 attorneys in Athens, Georgia, he has fought cases through jury trials and argued cases in front of the U.S. District Court, Northern and Middle District of Georgia.