Bankruptcy offers many protections to filers, as well as the opportunity to have a fresh start debt-free. The trade-off is that the bankruptcy process requires disclosure of your debts, assets, income, expenses, and other information about your financial affairs, and you need to understand the “Fair Market Value” of Your Assets.
Disclosing Your Assets
When you file for bankruptcy protection you must list all of your assets and their “fair market value” in your bankruptcy petition. Your assets include all real property you own, vehicles, financial accounts, investment accounts, household goods and furnishing, jewelry―basically anything of value that you own.
Protecting Your Assets
Listing your assets in bankruptcy does not mean you have to give up your assets! Most people who file for bankruptcy get to keep most or all of their belongings.
Bankruptcy law allows you to keep assets and belongings valued up to a certain dollar amount through exemptions. Exempt assets are protected in bankruptcy so long as their value does not exceed a certain dollar amount set by law.
Georgia’s exemption scheme provides for exemption amounts for your house, car(s), household goods, retirement accounts, and many other belongings. You can view the entire list of Georgia exemptions here.
Determining the “Fair Market Value” of Your Assets
To determine if an asset is fully exempt, you must determine its fair market value. So long as its fair market value does not exceed the allowable exemption amount, then you will get to keep the asset or belonging after bankruptcy.
Fair market value is the amount that you could sell an item for on the open market. You can think of this as the amount a willing buyer would pay to a willing seller when each has a reasonable knowledge of the relevant facts about the item. This is not the same as the replacement value of an item. The cost to replace an item new is typically more than its fair market value.
For example, you may have spent hundreds of dollars over the years accruing a collection of costume jewelry, but the current fair market value of that jewelry may be less than $100.00.
The “Fair Market Value” of Your Cars and House
There are tools that can be used to help determine the fair market value of cars and houses for purposes of bankruptcy.
A car can be valued on Kelly Blue Book (kbb.com) or other reputable car valuing site. In Georgia, you can protect up to $5,000 of equity in your vehicles.
A house can be valued by a real estate appraiser based on the house’s condition and recent comparable sales in the area. You can get a cursory idea of the value of your home on Zillow.com or another home valuing site. In Georgia the homestead exemption allows you to protect up to $21,500 of equity in real estate. If the title to the property is held by one of two spouses, you may exempt up to $43,000 of equity in real estate. You can calculate the equity in your home by subtracting the amount you owe on the home, plus the costs of sale, from its fair market value.
Hire the Premier Bankruptcy Law Firm in Savannah
Together we will help you properly list your property, belongings, and other assets, as well as help you determine the current fair market value of your property and belongings.
Here at the Law Office of Barbara B. Braziel, we offer free consultations so that you can understand the protections and benefits of bankruptcy and how filing with affect you and your family. We take the time to explain the bankruptcy process to our clients. We invite you to get to know us here and read about the clients we’ve helped here.
Find out more about Bankruptcy in our guide: All About Bankruptcy
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.