Will They Sell Your Property in Bankruptcy? Understanding How Property Value Affects Your Bankruptcy Case in Georgia

Filing for bankruptcy can be a complex and daunting process, particularly when it comes to understanding how your property will be treated. In Georgia, the value of your property plays a crucial role in determining what happens to your assets in both Chapter 7 and Chapter 13 bankruptcy cases. This blog will discuss how property value impacts your bankruptcy filing and what you can expect regarding your assets.

Chapter 7 Bankruptcy and Property

Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves selling non-exempt assets to pay off creditors. Understanding how your property is valued and what exemptions apply is critical to determining whether your assets will be sold.

Valuation of Property

In Chapter 7 bankruptcy, the trustee assigned to your case will evaluate your property to determine its current market value. This valuation is essential because it helps the trustee decide whether to sell the property to pay off your debts.


Exemptions play a crucial role in protecting your property in a Chapter 7 bankruptcy. In Georgia, state law provides specific exemptions that allow you to keep certain assets up to a certain value. Some key exemptions include:

Homestead Exemption: Protects up to $21,500 of equity in your primary residence. If you and your spouse file jointly, this exemption can double to $43,000.
Motor Vehicle Exemption: Protects up to $5,000 of equity in a motor vehicle.
Personal Property Exemption: Protects up to $5,000 of personal property, which can include household goods, clothing, and furniture.
Wildcard Exemption: Allows you to exempt up to $1,200 of any property, plus up to $10,000 of unused homestead exemption.

If the value of your property exceeds the exemption limits, the trustee may sell the non-exempt portion to pay your creditors. However, if the property is fully exempt or its value is less than the exemption, you can retain it.

Non-Exempt Property

If you own non-exempt property, the trustee may sell it to pay off your creditors. However, in many cases, individuals filing for Chapter 7 bankruptcy do not have significant non-exempt assets, allowing them to keep most or all of their property.

Chapter 13 Bankruptcy and Property

Chapter 13 bankruptcy involves creating a repayment plan to pay off your debts over three to five years. Unlike Chapter 7, Chapter 13 does not involve selling your assets. Instead, the value of your property affects how much you must pay to your creditors.

Valuation of Property

In Chapter 13, the value of your property is used to determine the amount you must repay to unsecured creditors. This is known as the “best interest of creditors” test, which ensures that unsecured creditors receive at least as much as they would in a Chapter 7 liquidation.

Equity in Property

The equity in your property (the difference between its market value and any outstanding loans) is a crucial factor in your repayment plan. If you have significant equity, your repayment plan must ensure that unsecured creditors receive payments equal to the value of your non-exempt equity.

Retaining Property

One of the advantages of Chapter 13 bankruptcy is that it allows you to retain your property, including non-exempt assets, as long as you adhere to the repayment plan. This can be particularly beneficial if you have valuable assets that exceed the exemption limits.

Determining Property Value

Accurately determining the value of your property is essential in both Chapter 7 and Chapter 13 bankruptcy. Here are some steps to ensure proper valuation:

1. Professional Appraisal

For real estate and valuable personal property, obtaining a professional appraisal can provide an accurate market value. This is particularly important for assets with fluctuating values, such as real estate.

2. Comparative Market Analysis

For real estate, a comparative market analysis (CMA) performed by a real estate agent can help determine the value based on recent sales of similar properties in your area.

3. Online Valuation Tools

For vehicles and other personal property, online valuation tools like Kelley Blue Book or NADA Guides can provide estimates of current market value.

4. Personal Knowledge

For everyday household items and personal belongings, your personal knowledge of their value can suffice, but ensure that the values are realistic and reflective of current market conditions.

Consulting a Bankruptcy Attorney

Navigating the complexities of property valuation and exemptions in bankruptcy can be challenging. Consulting a knowledgeable bankruptcy attorney in Georgia can help you understand your options, accurately value your property, and maximize your exemptions. An attorney can also guide you through the filing process, ensuring that you comply with all legal requirements and make informed decisions about your financial future.


Understanding how the value of your property affects your bankruptcy case in Georgia is essential for making informed decisions and protecting your assets. In Chapter 7 bankruptcy, exemptions play a critical role in determining whether your property will be sold. In Chapter 13 bankruptcy, the value of your property influences your repayment plan but allows you to retain your assets. Consulting with a bankruptcy attorney can provide valuable guidance and help you navigate the complexities of bankruptcy law, ensuring the best possible outcome for your financial situation.

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If you are currently struggling with overwhelming debt, or feel your financial situation will be severely stressed in the coming weeks, now is the best time to start looking at all options available to you.

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