Georgia Bankruptcy and Your Home
Can you file for bankruptcy in Georgia and still keep your home?Georgia bankruptcy laws allow debtors to protect up to $10,000 of equity in their home or residence. The exemption can be doubled to $20,000 if the property owner is married. Federal bankruptcy exemptions are not available in Georgia.
In light of more generous homestead exemptions available in other states (Arizona bankruptcy laws allow debtors to exempt $150,000 of home equity), Georgia’s $10,000 exemption is rather small. For example, if you own a home in Atlanta worth $200,000 that is encumbered by a $150,000 mortgage, you have accumulated $50,000 of home equity. In the event you were to file for chapter 7 bankruptcy, your home would be subject to sale by the trustee in order to satisfy claims of unsecured creditors. However, the mere fact that non-exempt home equity exists does not necessarily doom the house to forced sale by the trustee. In the above example, the debtor with $50,000 of home equity in Atlanta would have the option of paying the trustee $40,000 (the non-exempt equity in the house). This would prevent the sale of the home and allow the debtor to keep his or her residence through the chapter 7 bankruptcy process. Trustees really don’t want to sell your stuff. They want you to pay them cash so they don’t have to sell it. So if you have non-exempt assets, be prepared to make the trustee a cash offer if you can. Otherwise, your trustee will try to sell the assets since he or she has the obligation to do so.
It is also important to note that exempting home equity will not relieve your obligation to pay the mortgage. Your Georgia home can still be foreclosed on after bankruptcy if you fail to pay the mortgage. If you are considering bankruptcy in Georgia, contact a Georgia bankruptcy attorney.