Bankruptcy and Savings Accounts
Filing for bankruptcy does not mean that you have no money at all. Instead, filing for bankruptcy usually means you are struggling with excessive debt, and need a fresh start. The purpose of bankruptcy, depending on which type you file, is to discharge your debts or create a doable debt repayment plan so that you can get to a better financial place.
Before filing for bankruptcy, you may still have some money in a savings account. If you do have money in a savings account, it is important to know what will happen to that money if you choose to file for bankruptcy.
When you file for bankruptcy, everything you currently own becomes part of the bankruptcy estate. You will have to list all of your assets and this includes any money in your savings account. The bankruptcy trustee then uses money from any assets in the bankruptcy estate to pay back creditors. This means that it is possible for the trustee to take the money in your savings account for this purpose.
So what should you do if you want to file for bankruptcy, but have money in your savings account?
- Don’t try to withdrawal your money and hide it!—as previously mentioned, when you file for bankruptcy you must list all your assets, and that includes your money in your savings account. Don’t try to withdrawal it right before filing in an attempt to hide it as this will likely lead to accusations of bankruptcy fraud or dismissal of your bankruptcy without a discharge.
- Know that you may be able to protect money in your savings account by using an exemption—There is a way to possibly protect the money in your savings account by using a Georgia bankruptcy exemption. In Georgia, state exemptions prevent certain assets and money up to a particular value from being used to repay creditors. One exemption, the wild card exemption, allows for you to exempt $1,200 worth of property of your choosing. Therefore, if you haven’t used up this exemption on other property, you can use it to protect up to $1,200 of your savings account.
- Consult a skilled Georgia Bankruptcy Attorney—The best thing to do when you are considering filing for bankruptcy, and are worried about your assets such as your savings account, is to talk to an experienced bankruptcy attorney. The attorney can help you understand how to handle savings money and the best way to use your exemptions to try to protect it and avoid any problems that would prevent a successful discharge.
Get Free Georgia Bankruptcy Advice
If you are considering bankruptcy as a means to get in a better financial situation, but have questions on how it could impact cash in your savings account, make sure you seek the legal guidance of an experienced Atlanta bankruptcy attorney. The skilled attorneys at the Ballard Law Group have years of experience helping individuals through the bankruptcy process and can answer your questions about your specific situation.