Bankruptcy exemptions protect the equity in your property from creditors and the bankruptcy court—preventing the equity from being used to pay your creditors. Equity is the value of property after you subtract the amount of any liens against the property from its fair market value.

The equity in your home is one such asset in bankruptcy. And bankruptcy exemptions—including the homestead exemption—allow you to protect the property you will need to maintain a home and employment after bankruptcy.

Bankruptcy exemption amounts vary by state, so the amount you will be able to protect will depend on where you live and the type of bankruptcy you file (Chapter 7 or Chapter 13).

In Georgia, bankruptcy exemptions play a crucial role in both Chapter 7 and Chapter 13 bankruptcy filings. These exemptions allow individuals to retain certain assets, up to specific values, without them being liquidated to pay creditors. The homestead exemption is particularly important for homeowners, as it protects a portion of the equity in their primary residence. As of the knowledge cutoff in 2023, Georgia's homestead exemption allows an individual to exempt up to $21,500 of equity in their home, or $43,000 for a married couple filing jointly. Additionally, Georgia offers a wildcard exemption that can be applied to any property, including adding to the homestead exemption, up to a certain amount. It's important to note that exemption amounts are subject to periodic adjustments and can vary based on legislative changes. Debtors in Georgia should consult with an attorney to understand the most current exemption limits and how they apply to their specific situation.