Drowning in debt is a harrowing feeling that can make you feel like there’s no hope. Fortunately, bankruptcy is an option that might work for you. One of the first things you’ll have to determine is whether you’ll file a Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 bankruptcy is often referred to as a liquidation bankruptcy, but that term shouldn’t frighten most people. In order to file for a Chapter 7 bankruptcy, you’ll have to meet the terms of the means test. Meaning, you’ll need to earn so little income that you qualify for the process. Most people who meet those terms won’t possess enough non-exempt assets for a bankruptcy trustee to liquidate to pay off creditors. Nevertheless, having some of your property sold is a risk you’ll want to explore before committing to this debt relief option.
What assets are exempted from bankruptcy in Georgia?
There are several assets that are automatically exempted from the bankruptcy process in Georgia. These exemptions will allow you to keep many assets that you’ve worked hard for. Some of these include:
- Up to $21,500 of home equity for a single person or $43,000 for a couple filing together if they jointly own the home
- Up to $5,000 in cumulative motor vehicle equity
- Personal property of up to $300 per item for a maximum cumulative total of $5,000
- Up to $500 in jewelry
- Pensions and retirement plans
- Many public benefits, including veterans’, Social Security and unemployment benefits
- Tools of the trade up to $1,500 for items you need for work
- Wild card exemption of $1,200 and up to $10,000 of unused home equity exemption
The bankruptcy trustee handling your case will evaluate your non-exempt assets and compare those to the debts in your bankruptcy. They may decide that liquidating your non-exempt assets won’t make a big enough dent in the balance to warrant going through with selling any of your property to repay your creditors.
Ultimately, seeking legal guidance may help you learn more about how the bankruptcy may impact you, specifically. It’s critical to understand the rights and responsibilities you’ll have during the bankruptcy process so you can begin to more effectively enjoy the fresh financial start that comes with problematic debts being discharged.