Georgia Homestead Exemption

[Beautyberry]

My husband is filing in his name only. Our house is in his name only. Our attorney I said we qualify for the single homestead exemption of 20,500; but from what I've read we qualify for double exemption. Does anyone have some insight on this?

This is the law: (1) The debtor's aggregate interest, not to exceed $21,500.00 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor. In the event title to property used for the exemption provided under this paragraph is in one of two spouses who is a debtor, the amount of the exemption hereunder shall be $43,000.00.

[justbroke]

My husband is filing in his name only. Our house is in his name only. Our attorney I said we qualify for the single homestead exemption of 20,500; but from what I've read we qualify for double exemption. Does anyone have some insight on this?

I can't give you a complete legal conclusion, but to receive the homestead exemption for both husband and wife, they both must be debtors in the bankruptcy. I know that here in Florida, both husband and wife must file in order to receive twice the exemption values.

This really comes from the literal interpretation of the exemption law that you are using. In your example, you write "[t]he debtor's aggregate interest, not to exceed $21,500.00 in value". Since a non-filing spouse is not considered a debtor, they could not receive an exemption.

[Beautyberry]

I found this legal explanation from an academic legal paper. Would you mind reading in and telling everyone what you think? Thanks

The last sentence of O.C.G.A. §44-13-100(a)(1) only applies in limited circumstances and has been the cause of some confusion. Specifically, it provides that “[i]n the event title to property used for the exemption . . . is in one of two spouses who is a debtor, the amount of the exemption hereunder shall be $43,000.00.” Thus, in order to take advantage of the so called “double exemption”, title to the property must be solely titled in one spouse’s name. A married debtor may not use the double exemption if the residential property is jointly titled. In discussing this provision, Judge Mullins, Chief Judge for the Bankruptcy Court for the Northern District of Georgia, noted that the purpose of the double exemption “is to protect the non-debtor spouse’s equitable interest from the debtor’s creditors. If the non-debtor spouse has title to the property, he/she does not need such protection.” See Wright v. Taylor (In re Taylor), 2005 Bankr. LEXIS 269 (Bankr. N.D. Ga. 2005)(citing In re Hartley, 2002 Bankr. LEXIS 1884 at *3 (Bankr. N.D. Ga. 2002)(J. Drake)); see also In re Hiers, 2005 Bankr. LEXIS 3143 (S.D. Ga. 2005)(J. Walker). Moreover, because the courts have found that the purpose of the statute is to protect the non-debtor spouse’s equitable interest in the residence, courts have declined to extend the double exemption to a situation where the non-debtor spouse was separated from the debtor and no longer living in the residence. See In re Neary, 2004 Bankr. LEXIS 617 (Bankr. N.D.Ga. 2004)(J. Diehl).

1. Application of the “Double Exemption.”

In a recent case involving the double exemption, Judge Drake held that a debtor who owned 50% of his residence with the remaining 50% held by living trust (established for his spouse) was not entitled to double the homestead exemption per the last sentence of O.C.G.A. § 44-13-100(a)(1). Mann v Burroughs (In re: Burroughs), 2015 Bankr. LEXIS 1167 (Bankr. N.D. Ga. 2015)(J. Drake). In so finding, the Burroughs court stated that “Bankruptcy Courts in Georgia have consistently held that the last sentence of O.C.G.A. § 44-13-100(a)(1) permits a debtor to double the homestead exemption only in the circumstance where the debtor is married and the residence is solely titled in the filing spouse’s name.” 2015 Bankr. LEXIS 1167 at *5. As the Burroughs debtor owned the property jointly with the trust, the debtor was not permitted to double the exemption.

Finally, Bankruptcy Courts have extended the protection to include jointly filing debtors whose residence is solely titled in one spouse. In re Hartley, 2002 Bankr. LEXIS 1884 (Bankr. N.D. Ga. 2002)(J. Drake). This case was decided before the legislature increased the amounts available under the statute. The debtors, husband and wife, filed a joint petition for relief under Chapter 7 and claimed a double exemption (which was $20,000.00 at that time) in their residence despite the fact that the residence was solely titled in the name of the debtor husband. The trustee objected and argued that the statute did not apply to the Hartley debtors as both debtors were in bankruptcy. In holding that the Hartley debtors were entitled to take the full double exemption, Judge Drake looked to the legislative intent and history of the statute and “found no logical conclusion to treat jointly filing debtors differently than a debtor/non-debtor couple.” Id. at *4.

[justbroke]

What you posted is in alignment with what I wrote. The only difference from Florida is where the title is in both spouse's name. How State non-bankruptcy law interacts with Federal bankruptcy law is an important distinction. This is why it's difficult for anyone to gauge what would happen to some particular debtor in a very specific State.

From what you wrote and from what Georgia caselaw seems to imply, a married debtor could receive the non-filing spouse's exemption in cases where the property is titled solely in the (filing) debtor's name.

You may want to give that information to your attorney. You may want to clarify that the Note and Mortgage (Deed of Trust) are solely in his name, he is the debtor, and that you want to use the exemption for both the husband, as debtor, and the non-filing spouse.

[Beautyberry]

So, it seems like the double exemption might apply? I'll try to get my attorney to read this but when I questioned him before, he just kept telling me that since I'm not on the title, my husband doesn't get the doue exemption. By the way, this law just changed last year.