Governor Nathan Deal of Georgia has signed Senate bill 117 to increase the homestead exemption amount from $10,000.00 to $21,500.00 for individuals and from $20,000.00 to $43,000.00 for married couples.  Also raised was the median income table for Georgia families – from $64,223 for a family of four to $66,250, which makes it a little bit easier to pass the means test and qualify to file Chapter 7.  These two changes in Georgia state law are wonderful news for struggling families, as filers will now be able to save more of the equity in their home in a Chapter 7 and are more likely to pass the “best interest of creditors test” (to confirm a Chapter 13 plan, creditors must receive as much as they would if the debtor had file a Chapter 7; therefore, if the exemption amount is increased, then creditors would receive that much less if the debtor had file a Chapter 7).  The homestead exemption statute can be found at O.C.G.A. 44-13-100 if you’d like to take a look for yourself.

Georgia has historically been one of the worst states when talking about exemption laws. For example, Florida and Texas permit an unlimited homestead exemption for their residents (if you have lived there for a certain period of time).  This substantial increase in equity able to be exempted by Georgia families is a step in the right direction.The next step is to allow Chapter 13 debtors to modify the mortgage on their principal residence to help avert this ongoing foreclosure crisis.  Unfortunately, I doubt Congress will ever allow that to happen.  It would simply make too much sense.