Does bankruptcy protect valuable assets like my home?
One of the most common concerns anyone considering filing for bankruptcy may have is whether they will have to give up their home or other valued property. It would be great to be able to say that the answer is a flat out, no. But it really depends on all the circumstances of your particular case.
There can be many variables that can affect whether the home can be protected from creditors. The law does allow bankruptcy filers to exempt property from collection efforts. But understanding how those exemptions apply in a given case can be difficult to sort out on your own. Sadly, very often, information being provided on the Internet can leave you more confused than when you started.
For example, if you conduct an online search for “Georgia bankruptcy exemptions” you will find yourself faced with a long list of possible links to any number of sites. One of the first things you might notice is that it’s hard to get to an unbiased source. If you do find one, you then might notice that the language is such that it’s awfully hard to decipher just what is what.
As information from the Georgia Bar Association notes, protection of assets such as a home or vehicle, depends on the value of the asset and the type of bankruptcy pursued.
If you file for Chapter 7, a lot will hinge on whether your assets hold any equity. Georgia law permits only up to $10,600 in home equity to be exempted. If the filing is on behalf of a married couple, the amount doubles. The exemption value on a vehicle is $3,500 for an individual and $7,000 for married couples.
Chapter 13 filers may find that they can enjoy greater protection against the loss of such valuable assets. But again, it requires a full examination of the individual circumstances.
We’ve only talked about one aspect of filing for bankruptcy here and you can see that it can be complicated and confusing. There are many elements to consider and to understand, which is why consulting an attorney first is always advisable.
Source: Georgia Bar Association, “Bankruptcy,” accessed Aug. 15, 2014