Georgia code § 44-13-100 states that one exemption allowed under bankruptcy in Georgia is “The debtor’s aggregate interest, not to exceed $1,500.00 in value, in any implements, professional books, or tools of the trade of the debtor or the trade of a dependent of the debtor;” but what many people do not understand is what is considered a tool of the trade and how it applies. For most Chapter 7 bankruptcies, this section applies to those debtors who are self-employed. However, in some cases, there are certain professions where a person who is not self employed that may require a person to have their own tools including:
- Carpenters – many carpenters have their own tools for working on various jobs even if they are not self-employed. These tools may include power saws, nail guns and other items which they use exclusively for employment purposes.
- Plumbers – oftentimes, plumbing professionals have their own wrenches and other tools that are necessary to perform their jobs. While their employer may provide specialized tools, in many cases, everyday-use tools are considered their tools of the trade.
- Salespersons – some salespeople maintain a vehicle that is intended only for business purposes and not for personal use. In this case, provided the vehicle has $1,500 or less in equity, it may be protected under the Georgia bankruptcy exemptions.
Discussing tools of the trade exemptions with your attorney
When you meet with a Marietta bankruptcy attorney, one of the items that will be reviewed is your personal property and assets. It is important to discuss any items that are considered necessary for performing your job that you own versus those that are owned by your employer. Depending on your profession, this could include a library of books, computers specialized software, animals and for fisherman, boats and nets. Insurance brokers, accountants and other professionals may have specific equipment that is necessary for the day-to-day operation of their businesses as well.
Even after you file for bankruptcy, you need to continue earning a living and regardless of how you earn your living, you probably have specific tools that are necessary for your job. Discussing your options for protecting property that is used for work with your Marietta bankruptcy attorney is important.
For a free legal consultation, call (770) 792-1000
What happens if the exemption is too low?
Fortunately, Georgia bankruptcy laws have two sets of exceptions that can help those who have more tools of the trade than the $1,500 exemption will cover. First, there is a wildcard exemption of $600 which may be applied to any asset. Secondarily, bankruptcy filers who have not used their full homestead exemption may be able to apply up to $5,000 of that exemption to other assets.
The bankruptcy code is very confusing and since Georgia does not allow debtors to utilize the federal exemptions, it can be even more confusing. Protecting tools you need for working purposes is critical to enable you to continue earning a living to get back on your feet financially after bankruptcy.
If you find you are unable to manage your current debt and you are feeling overwhelmed, you may be thinking that bankruptcy could be the answer. At the Law Offices of Roger Ghai, a Marietta bankruptcy attorney we understand this is not an easy decision. However, we will be happy to review your financial situation and help you determine the best way to proceed. Call us today at (770) 792-1000.
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