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jewelry exemptions in Georgia bankruptcy cases
valuation of jewelry and watches + Georgia bankruptcy
Georgia bankruptcy exemptions
Valuation of Used and Heirloom Jewelry in
Chapter 7 and Chapter 13 Bankruptcy Cases
“How does the bankruptcy court treat my heirloom jewelry and collectibles?” I get this question frequently, especially from clients in their 40’s and 50’s and from clients who previously earned good money but have been downsized.
Recently, for example, I represented a client in his mid-40’s who owned an expensive watch and who had inherited his grandmother’s family jewelry that was stored in a safe deposit box. At first, my client was reluctant to tell me about this property:
Client: Between you and me, I have some jewelry and a nice watch, but no one really knows about it. I don’t have to report this do I?
Jonathan: “Please don’t use the phrase “between you and me.” While anything you tell me will remain confidential, I will not be a party to bankruptcy fraud. If you reveal information to me that should be a part of your case, or if I learn about information that needs to be disclosed, I am going to include it in your case. I will not risk my license to practice law or my reputation for you or any other client.
Upon further discussion, I learned that my prospective client had recently been through a contested divorce and that his ex-wife was not a big fan. I pointed out to him that his wife would most likely receive communication from the Chapter 7 trustee to verify that he was current with child support and that she and her lawyer would most likely review his schedules. The ex-wife certainly knew about the watch and the jewelry and did he want to risk jail time when his ex-wife reported the omission to the trustee?
My prospective client thought about this for a while and he agreed to my ground rules - he would answer all of my questions accurately and in full and he would not ask me to do anything that smelled remotely like misrepresentation and fraud.
It turned out that his jewelry and watch had a much lower market value than he thought. I suggested that he contact an Atlanta area jewelry buyer for the purpose of obtaining a valuation. The jewelry/pawn valuation came in at just over $5,000 which meant that we could fit this property into his available exemptions - the $500 jewelry exemption set out at 44-13-100(a)(5) and the wild card exemption that allowed him to use $4,500 of his unused real estate exemption per 44-13-100(a)(6).
At the 341 hearing the trustee did ask about the jewelry and we handed him the written offer to buy from the pawn shop along with printouts from eBay. The trustee took a look and moved on - the jewelry became a non-issue.
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