If you’re considering filing for Chapter 7 bankruptcy in Augusta, you may be worried about losing everything, especially your home and car. At Duncan Bankruptcy Law, we hear this fear every day. The good news is that the common belief that bankruptcy means losing everything is a myth. Bankruptcy laws actually provide powerful protections to help you keep what you need for a fresh start.
Understanding Bankruptcy Exemptions: Your Financial Shield
The key to protecting your assets in a bankruptcy case is in bankruptcy exemptions. These are federal and state laws that create a “shield” around a certain amount of equity in your assets. Equity is the fair market value of your property minus what you still owe on any secured loans against it.
The Georgia state law provides a set of exemptions that are often used by Augusta clients. These exemptions allow you to keep your home and car if you file for Chapter 7 bankruptcy in Georgia. It is crucial to understand and apply these exemptions correctly.
Protecting Your Home: The Georgia Homestead Exemption
Your home is often the most valuable asset you own, and protecting it should be a top priority. In Georgia, you have the opportunity to take advantage of the Homestead Exemption, which allows you to exempt up to $21,500 of equity in your home under O.C.G.A § 44-13-100(a)(1). For married couples filing jointly, this amount can be doubled to $43,000, providing additional protection for your home.
What does this mean for you?
If the value of your home is lower than the exemption amount available, the bankruptcy trustee will not be able to sell it to pay off your debts. For example, if your house is worth $200,000 but you owe $185,000 on the mortgage, you will have $15,000 equity. This amount is fully protected by the Georgia exemption, so you will be able to keep your house during the bankruptcy process.
If your equity in your home exceeds the exemption amount, your situation becomes more complicated, but it doesn’t automatically mean that you will lose your home. There may be strategies available, and it’s essential to speak with one of our Augusta bankruptcy lawyers to discuss your specific situation and options.
Protecting Your Vehicle: The Georgia Motor Vehicle Exemption
Reliable transportation is essential for work and family life. The Georgia law also provides an exemption for your vehicle. Under O.C.G.A. § 44-13-100(a)(3), you can claim up to $5,000 of equity in one vehicle.
What does this mean for you?
If you own your car and it’s worth $5,000 or less, you may be able to keep it. However, if you are still paying off a car loan, you likely have very little equity in your vehicle. For example, if your car is worth $10,000 and you owe $8,000 on the loan, you have only $2,000 equity, which falls within the exemption limits.
If you have a car loan, you may have another option: reaffirmation. Reaffirmation is a new agreement with your lender where you promise to continue making payments in order to keep your car. This means that you can continue owning the vehicle as long as you continue to make payments, even if you have other debts being paid off.
What About My Other Property?
Exemptions also apply to other types of property, including:
- Household goods and furniture
- Clothing
- Tools of your trade
- A portion of unpaid wages
- Retirement accounts (such as 401(k)s and IRAs)
We know how to protect your home, car, and assets in a bankruptcy case, while helping you eliminate your debt. Our goal is to help you use the law to your advantage and achieve a fresh start financially.
You Don’t Have to Navigate This Alone
Bankruptcy law can be complicated, and correctly applying exemptions requires the expertise of an experienced professional. Making mistakes can unnecessarily put your assets at risk. At Duncan Bankruptcy Law, we focus on your peace of mind. We have helped thousands of people in and around Augusta recover from financial difficulties and can help you too.
Remember, bankruptcy is not who you are, it’s what you do. If you are experiencing harassment from debt collectors and feel like your back is against the wall, we can help you regain control.
Take the First Step Toward a Fresh Start
If you’re worried about the future of your home, car, or other assets, we can help provide clarity and hope. Our Free Bankruptcy Consultation service offers a personalized review of your unique situation and explains your options.
Contact Duncan Bankruptcy Law today. Our experienced Augusta-based Chapter 7 bankruptcy lawyers will use their more than three decades of experience to help you get your financial life back on track.
