Media

Our Office

115 East Main Street, Suite A1B-9C
Buford, GA 30518
Directions

 

Call us today at 678-541-6770 for a free consultation

 

or Book an appointment online at: https://koalendar.com/e/meet-with-ken-parker
 

We are conveniently located close to the Mall of Georgia in historic downtown Buford in the old tannery building in the Executive offices at Toast and Jam Community.
 

Exemptions - In a Box

Exemptions ... In a BOX.

Every day, prospective clients call inquiring about bankruptcy options and one of the most asked questions is: Will I lose my property if I file a Chapter 7? Most of the time, the answer is NO.

Filing Bankruptcy can be a stressful process and the thought of losing all of your property heightens the stress level. I like to explain the answer so that my clients fully understand what happens when you file a Chapter 7 Bankruptcy. Imagine a Box big enough to hold all of your worldly possessions. In this ”Bankruptcy Box” contains any cash you have on hand, any money in your checking or savings accounts, all of your house hold items, clothing, 401Ks, 403Bs, Cars, Houses, cats, dogs … EVERYTHING. In a Chapter 7 case, the court appoints a Chapter 7 Trustee and the Trustee’s job is to look into your Bankruptcy Box and sell everything in the box to make money to pay at least a portion of your debt. BUT there are 2 rules the Trustee has to abide by.

Rule Number 1 is: If there is a piece of property in the Bankruptcy Box that has a secured debt attached to it, the Trustee has to pay off the secured creditor first before disbursing any money to any other creditors.

Rune Number 2 is: You are allowed what called Exemptions – Which allows you to pull certain items out of your Bankruptcy Box and PROTECT them from being sold.

Here is an example of the application of both rules: Let’s say you have a 2005 Ford Taurus that’s worth $6,500.00– It goes into the Box. Let’s say you owe $4,000.00 on the car. Applying rule number 1, If the trustee wants to try and sell your car for the benefit of credits. He would first have to pay out $4,000.00 to the company you owe for the car. This would leave $2,500.00 in your Bankruptcy Box. Rule number 2 is the Exemption for the Car – Georgia Law allows you to EXEMPT up to $3,500.00 in a vehicle. So if the Trustee tries to take your car, he would have to pay out a total if $4000.00 AND give you up to $3,500 for a total of $7,500.00 for a car that’s only worth $6,500.00. Is the Trustee going to do this? NO, because there would not be any profit in the transaction.

In many cases, especially with secured property, it is not uncommon to owe more that the item is worth – Think houses! Many people are “Upside down” on their house meaning they owe more for the house than it’s worth. If that is the case, then the Trustee would take no interest in your house because there is no equity in the house and the Trustee would lose money and gain nothing for the benefit of creditors.

There is a list of Exemptions printed in the Georgia Code at O.C.G.A section 44-13-100. Here is a quick rundown of the most used Exemptions:
- $21,500 in home equity
- $3,500 in all vehicles
- $5,000 in household items
- $500 in Jewelry

In addition to these commonly used exemptions, Georgia also allow each debtor to use what is referred to as a WILDCARD Exemption. The Wildcard is $600.00 PLUS up to $5,000.00 of any unused homestead Exemption. If you have a house that you have no equity, then you would get to apply the Wildcard Exemption of $5,000.00 plus the $600 for a total if $5,600.00. You can apply this Wildcard Exemption toward Any property in your Bankruptcy Box.

For more information on Exemptions or the Bankruptcy process, please feel free to call me at 678-541-6770.

Ken