“We realize the need to make sure Georgia’s bankruptcy provisions are up-to-date and provide adequate and fair exemptions that help both debtors and creditors,” said Sen. Tarver, who notes there has been no formal review of Georgia bankruptcy exemption in over a decade. “Our goal with this study committee is to hear from all sides of this issue to gather as much information as possible to ensure any proposed legislation changes are beneficial to all Georgians.”
Standing North Georgia Chapter 13 Bankruptcy Trustee Nancy Whaley spoke with the panel on her experiences with debtors who file for the homestead exemption. Unlike a Chapter 7 bankruptcy liquidation process, Chapter 13 debtors are allowed to keep their assets and are set up on a repayment schedule to their creditors. She feels as though any broad-based increase to the current exemption in Georgia could raise the number of bankruptcy filings because of debtors trying to take advantage of the new allowances. She notes that there are people that do need protection such as elderly widows or former military service members who may not have a way to generate income, and that Georgia could benefit from a targeted policy in which designated needs groups could qualify.
Committee members also heard testimony from Attorney Regina Thomas on behalf of the Georgia Mortgage Bankers. She believes that an exemption increase would not have a significant impact on the mortgage creditor industry and that home equity losses were the biggest issue with bankruptcy filings. She told the panel that a targeted rather than broad exemption increase would be more beneficial to the state, but would set up a difficult task of determining debtors’ qualifications based on actual need or if their bankruptcy was due to poor financial decisions. Thomas also suggested that the committee should refrain from any revisions until the federal government has decided on how to handle the current financial crisis.
The panel concluded their meeting with Attorney Ward Stone who chairs the Bankruptcy Section for the State Bar of Georgia. He noted that his position could not allow for any numerical suggestions for any exemption change, he mentioned that provisions such as yearly inflation adjustments to the exemption might be worth considering.
The Georgia State Senate created this study committee this past session to gather information and determine whether proposed legislation changes to the current code are necessary. Future committee meeting dates have not yet been determined before the 2009 Legislative Session begins in January.
Sen. Ed Tarver represents the 22nd Senate District which includes Richmond County. He may be reached at 404.656.0340 or via e-mail at ed.tarver@senate.ga.gov.
PRESS RELEASE
For Immediate Release:
December 22, 2008
For Information Contact:
Raegan Weber,Director
Matt Colvin, Communications Associate
matthew.colvin@senate.ga.gov
404.656.0028