Committee considers bankruptcy exemptions

ATLANTA --- State legislators could soon consider a bill boosting the amount of home equity Georgians can keep when they enter bankruptcy.


Debtors retain $10,000 in home equity in bankruptcy, less than half of what federal bankruptcy law permits in exemptions.

But a Senate committee on Tuesday talked about increasing the state's exemption, possibly by $40,000.

They heard testimony from debtors who said an increase could help them keep their home, and from creditors who warned any larger exemptions could make credit more costly and harder to obtain.

Joanne Brigdon, of Augusta, told senators a higher exemption would allow her to enter Chapter 7 bankruptcy and discharge the $11,000 in credit card and medical debts. Ms. Brigdon, who is over 65 and cannot walk, said she receives $1,300 a month in Social Security.

The number of Georgians filing for bankruptcy reached 14,396 in the second quarter of this year, a two-and-a-half-year high, according to the American Bankruptcy Institute.

Joe Brannen, the president and CEO of the Georgia Bankers Association, said creditors would probably see a higher exemption as increased risk in loaning money. That could drive up the cost of loans, which would penalize all borrowers and make credit harder to find.

The amount of the exemption can determine which type of bankruptcy a debtor can declare -- Chapter 7 or Chapter 13 -- and how much home equity they can protect.

Committee Chairman Sen. Ed Tarver, D-Augusta, said the review could lead to the resurrection of his bill increasing the exemption to $50,000 for one person and $100,000 for a couple.

Reach Jake Armstrong at (404) 589-8424 or