Rachel Hunter, J.D. | Article

Exemptions in Georgia

In Georgia, there are two sets of exemptions, constitutional and statutory. The exemption laws were enacted just after the Civil War and have not kept pace with modern times. Georgia allows you to exempt up to $5,000 worth of your property under the constitutional exemption. O.C.G.A. § 44-13-1. In addition to the $5,000, the debtor can also exempt up to $300 worth of kitchen and household furniture. § 44-13-41. In order to assert the constitutional exemption, the debtor must file a petition with the probate judge in the county where the debtor resides. O.C.G.A. § 44-13-4 and § 44-13-42. If the debtor refuses to apply for this exemption, the spouse and/or children/dependents can do it. O.C.G.A. § 44-13-2.

In most cases, a debtor will be infinitely better off by choosing the statutory exemptions which are more generous. For a complete listing, see O.C.G.A. § 44-13-100. The bad news is that the statutory exemptions can only be used for bankruptcy purposes and for estates where the deceased dies without a will (called intestate) and is insolvent (meaning that the debts of the debtor outweigh any assets). Again, to claim the exemption the debtor must file a petition with the probate judge in the county where the debtor resides, and the exemption can be claimed by the spouse of the debtor. O.C.G.A. § 44-13-101.

So, if you are not filing bankruptcy, does that mean you are out of luck? Not necessarily. If an item is owned jointly or subject to a mortgage or other lien, i.e., if a car is still being financed or a home has little equity and is mortgaged or subject to a deed of trust, it cannot be seized and sold. While wages can be garnished up to 25% of a debtor’s disposable pay, things like Social Security, Veteran’s benefits, unemployment compensation, disability and retirement cannot be garnished at all. Debtors can also minimize levy on bank accounts by getting an online or out-of state bank account or pre-paid debit card, going on a cash-only basis or by other lawful means.

UPDATE! Earlier in the year the Georgia Legislature increased the amount of the constitutional and statutory exemptions to include real or personal property used as the debtor’s primary residence. Under the constitutional exemptions, a debtor can exempt up to $21,500 in real or personal property used as a primary residence. For the statutory exemptions, this amount is the same, but the statute further provides that where title to the property is “in one of two spouses who is a debtor, the amount of the exemption hereunder shall be $43,000[.]” O.C.G.A. § 44-13-101 (as amended).

There are specifics as to what must be included in the application. O.C.G.A. § 44-13-2. Notice has to be given to creditors and the application published as per the statute. O.C.G.A. § 44-13-7 and 8. The creditors can object; if they do, then appraisers are appointed and will examine and assess the value of the property. Regardless of whether there are objections, a hearing is scheduled and the judge has to approve the exemptions and transmit the approval to the clerk for recording. O.C.G.A. § 44-13-11.

Copyright (c) 2012 by Rachel Lea Hunter

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