Georgia Homestead Exemption Increases to $50,000.00/$100,000.00 on July 1, 2026

If you are contemplating filing for Bankruptcy and own a home, you probably will want to consider waiting a few weeks. Georgia Governor Brian Kemp has signed House Bill HB 1024, which increases the Georgia Homestead Exemption from the current $21,500.00 to $50,000.00 effective July 1, 2026. If the residence is titled in the name of one of two spouses who is a debtor, the exemption is doubled to $100,000.00. Further, starting on July 1, 2031, the exemption amount is revised annually based on the inflation rate of the prior year.

The amendments to O.C.G.A. §44-13-100 are:

“(1)(A) The debtor’s aggregate interest, not to exceed ~~$21,500.00~~ $50,000.00 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; provided, however, that beginning July 1, 2031, and annually thereafter, such exemption shall be revised by being multiplied by the inflation rate of the prior year. In the event title to property used for the exemption provided under this paragraph is in one of two spouses who is a debtor, and such property is the primary residence of both spouses, the amount of the exemption hereunder shall be ~~$43,000.00~~ $100,000.00; provided, however, that, beginning July 1, 2031, and annually thereafter, such exemption shall be revised by being multiplied by the inflation rate of the prior year;

(B) As used in this paragraph, the term ‘inflation rate’ means the annual inflationary index rate as determined for a given year by the state revenue commissioner by promulgating a standardized method for determining annual inflationary index rates which reflect the effects of inflation and deflation on the cost of living for residents of this state for a given calendar year. Such method may utilize the Consumer Price Index as reported by the Bureau of Labor Statistics of the United States Department of Labor or any other similar index established by the federal government if the state revenue commissioner determines that such federal index fairly reflects the effects of inflation and deflation on the cost of living for residents of this state.”

The Bill was cosponsored by Representative Soo Hong along with Rep. Matt Reeves, Rep. Rob Leverett and Sen. Marty Harbin.

Scott Riddle’s practice focuses on bankruptcy and reorganization. Scott has represented businesses and other parties in Bankruptcy cases for over 20 years. You can contact Scott at 404-815-0164 or scott@scottriddlelaw.com. For more information, click here.

US Supreme Court – “Reasonable Time” Requirement Applies to Rule 60(b) Motions to Vacate Void Judgments

By Scott Riddle Posted in US Supreme Court Cases

Coney Island Auto Parts Unlimited, Inc. v. Burton, Trustee, 2026 WL 135998 (January 20, 2026) (click here for .pdf). In 2014, Debtor Vista-Pro Automotive, LLC filed an adversary proceeding against Coney Island to recover $50,000.00 in unpaid invoices. Coney Island did not answer and a default judgment was entered in 2015. In 2021, the Trustee was able to garnish Coney Island’s bank accounts. Coney Island then filed a Motion to vacate the judgment pursant to Federal Rule of Civil Procedure 60 on the grounds that it had not been properly served and, therefore, the 2015 judgment was void. The Bankruptcy Court denied the Motion because it was not filed within a “reasonable time” and the District Court and Eighth Circuit affirmed.

Rule 60(b)(4) expressly provides that a party may move for relief from a void judgment. However, Rule 60(c)(1) provides that a “motion under Rule 60(b) must be made within a reasonable time.”

The structure of Rule 60 confirms what the plain text of subdivision (c)(1) provides. When Rule 60 modifies the default reasonable-time limit, it does so expressly. For example, Rule 60(c)(1) imposes a 1-year limit on Rule 60(b) motions alleging mistakes, new evidence, or fraud. Thus, one would expect Rule 60 to include an analogous provision if a special, unlimited-time principle applied to motions alleging voidness. …But the Rule does not.

Coney Island argued that the reasonable time limit of Rule 60(b)(1) did not apply to void judgments, and the passage of time did not turn a nullity into an enforceable judgment.

This argument cannot bear the weight that Coney Island and others have placed on it. Even if the passage of time cannot cure voidness, the same principle holds true for most legal errors. Nevertheless, statutes and rules routinely limit the time during which a party can seek relief from a judgment infected by error. Therefore, a party in Coney Island’s position would need to show that some principle of law, such as the Due Process Clause, gives a party the right to allege voidness at any time. .. Giving a party a “reasonable” time to seek relief from an allegedly void judgment may well be all that due process demands.

The analysis is not different because the issue was failure of proper service and the possibility that a party may not learn of the judgment for a significant period of time. A defendant may strategically use that unlimited time to wait and file a Rule 60(b) motion until the plaintiff attempts to collect on the judgment. There was also no consensus among other courts that a party could move for relief at any time, and the Rule’s “text and structure” take precedence over historical practice. Similarly, policy concerns over an interpretation of a rule generally do not carry any weight when a rule is not ambiguous.

As Coney Island did not contend that its Motion was filed within a reasonable time, the lower court’s decision was affirmed. “Litigants seeking relief under Rule 60(b)(4) must comply with Rule 60(c)(1) and file a motion within a reasonable time.”

11th Circuit: Equitable Tolling Still Does Not Apply To Deadline For §523 Discharge Complaints

By Scott Riddle Posted in Eleventh Circuit Cases

“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” Samuel Beckett in Worstword, Ho. Many have tried to extend the deadline for discharge complaints that is found in Bankruptcy Rule 4007(c), almost always after missing the deadline. The Eleventh Circuit recently affirmed that equitable tolling still does not apply to extend the deadline in TL90108 LLC v. Ford, 147 F.4th 1351, 2025 WL 2304512 (11^th Cir., August 11, 2025). The issue was whether equitable tolling applied to the Bankruptcy Rule 4007(c) deadline to file a complaint under 11 U.S.C. §523(c) in light of subsequent Supreme Court opinions.

A previous panel held that equitable tolling did not apply to Rule 4007. See In re Alton, 837 F.2d 457 (11th Cir. 1988). The Creditor argued that the decision in Alton had been abrogated by the Supreme Court’s decisions in Kontrick v. Ryan, 540 U.S. 443, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004), and Holland v. Florida, 560 U.S. 631, 130 S.Ct. 2549, 177 L.Ed.2d 130 (2010). In Kontrick, the Supreme Court held that Rule 4004 (denial of discharge) was a non-jurisdictional claim-processing rule, but it stopped short of deciding whether equitable tolling might apply.

After Kontrick, the Court considered, in Holland, 560 U.S. at 645, 130 S.Ct. 2549, whether the nonjurisdictional statute of limitations in the Antiterrorism and Effective Death Penalty Act (“AEDPA”) may be equitably tolled. The Court concluded that “a nonjurisdictional federal statute of limitations is normally subject to a rebuttable presumption in favor of equitable tolling.” Id. at 645–46, 130 S.Ct. 2549 (emphasis in original) (internal quotation marks omitted). Thus, based on the combination of Kontrick and Holland, the limitations period in Rule 4004—closely related to Rule 4007 —is presumably subject to equitable tolling.

The Creditor argued that these cases effectively established that Rule 4007 was also a non-jurisdictional, claim-processing rule like Rule 4004 and “have removed Alton’s doctrinal underpinning to the point of abrogation, leaving behind the presumption in favor of equitable tolling.” The Circuit panel agreed that Rule 4007 is also a non-jurisdictional, claim-processing rule but that was not sufficient to overturn Alton. Nothing in Kontrick leads to the conclusion that Rule 4007 can be equitably tolled, and Holland does not apply to the Bankruptcy Rules. “The doctrinal underpinning of our decision in Alton was a plain reading of Rule 4007(c) and the absence of any express language in the rule indicating that its deadline was subject to equitable doctrines.” See also Nutraceutical Corp. v. Lambert, 586 U.S. 188, 139 S.Ct. 710, 203 L.Ed.2d 43 (2019) (“Whether a rule precludes equitable tolling turns not on its jurisdictional character but rather on whether the text of the rule leaves room for such flexibility.” (emphasis added). The Creditor’s motion to extend the deadline to file a discharge complaint was, therefore, properly denied in the Bankruptcy Court.

Trustee Cannot Avoid Deed Because Every Letter Of the Notary’s Signature Was Not Fully Discernible

By Scott Riddle Posted in Northern District Cases

In Barger v. Rocket Mortgage, LLC, Adv. Proc. No. 23-5164-bem, 2025 WL 1416871 (Bankr. N.D. Ga. May 15, 2025), the Chapter 7 Trustee sought to avoid a deed because every letter of the notary’s name was not fully discernible in the signature. The Court previously granted summary judgment to the lender/transferee and the Trustee sought reconsideration, contending that the Court erred in its interpretation of the Exact Name requirement in O.C.G.A. §45-17-8.1(a). Judge Ellis-Monro denied the Motion.

“[I]n documenting a notarial act, a notary public shall sign on the notarial certification, by hand in ink, only and exactly the name indicated on the notary’s commission and shall record on the notarial certification the exact date of the notarial act.”

O.C.G.A. § 45-17-8.1(a).

The Court found that the statute does not impose a legibility requirement or a “directive as to the quality of the signature or the discernibility of each letter in the signature.”

Manufactured Home Is Not “Motor Vehicle” So Cram Down Of Secured Loan In Chapter 13 Plan Is Not Prohibited By Hanging Paragraph of §1325(a)

By Scott Riddle Posted in Consumer Bankruptcy Guide, Middle District Cases

In re Thomas, Ch. 13 Case No. 24-10535-RMM, 2025 WL 1373615 (Bankr. M.D. Ga. May 12, 2025). Debtors’ Chapter 13 Plan proposed to reduce the secured creditor’s claim to the value of the manufactured home that served as collateral. The sole legal issue was whether a manufactured home that was Debtors’ residence was a “motor vehicle” for purposes of the hanging paragraph of 11 U.S.C. §1325(a). Debtors had obtained the loan less than 910 days before the filing of the Bankruptcy petition.

The Lender argued that the home was a motor vehicle and, therefore, the Debtors could not cram down the loan. The Court disagreed. “The definition of motor vehicle has two distinct parts: it is a vehicle that is both (1) ‘driven or drawn by mechanical power’ and (2) ‘manufactured primarily for use on public streets, roads, and highways.’” See 49 USC §30102(a)(7). A manufactured home does not fall within this definition based on the plain language of this statute. This conclusion was also consistent with all relevant persuasive authority. The National Highway Transportation Safety Administration has also excluded manufactured homes from the definition of motor vehicles for at least 50 years. See, e.g., NHTSA Interpretation Letter to Constance Newman (Mar. 17, 1976), 1976 WL 533912, also available at https://www.nhtsa.gov/interpretations/aiam2279).

The Lender’s objection to the Chapter 13 Plan was, therefore, overruled.

11th Circuit – Damages for False Imprisonment are Nondischargeable as Willful and Malicious Injury

By Scott Riddle Posted in Eleventh Circuit Cases, Northern District Cases

In Watson v. Bradsher and Ali, 2025 WL 2205853 (11th Cir. August 4, 2025), the Debtor met Plaintiffs at a bar and invited one of them to go home with him. She sternly rejected his advances and moved with her friend to another part of the bar. Debtor tried to pay his tab and could not find his wallet, and accused Plaintiffs of stealing it. “He admitted that he had not seen [Plaintiff] take his wallet but insisted that ‘th[o]se bitches got my wallet.’ He repeatedly demanded [Plaintiffs] arrest and threatened to have the bar shut down if the officers did not comply…. The next day, Watson found his wallet in his car.” Debtor’s accusations caused the police to detain the Plaintiffs.

[Plaintiffs] sued [Debtor] in state court for slander per se, false imprisonment, and battery. A jury returned a general verdict for [Plaintiffs]. The jury awarded [Plaintiff Bradsher] compensatory damages of $75,000 and punitive damages of $5,000. It awarded [Ali] compensatory damages of $25,000 and punitive damages of $5,000. The court also awarded the women $39,000 in attorney’s fees and $1,500 in expenses.

Debtor filed a Chapter 7 petition and Plaintiffs filed a proceeding to except the judgment debt from his discharge pursuant to 11 U.S.C. §523(a)(6). After a trial, Judge Ellis-Monro “ruled that the judgment debts for slander and false imprisonment were nondischargeable but that the judgment debt owed to Ali for battery was dischargeable. [She] found that Watson did not intend to make physical contact with Ali when he poked her forehead, so the injury could not have been “willful.” And [she] attributed $2,500 of Ali’s judgment to the debt for battery.”

Real Property Owned By Dissolved LLC Was Not Property Of Individual Member’s Bankruptcy Estate

By Scott Riddle Posted in Northern District Cases

In In re Kimball, Ch. 7 Case No. 24-11036-pmb, 667 B.R. 487 (Bankr. N.D. Ga. 2025) (click here for pdf) , the Lender foreclosed on commercial property owned by a limited liability company on August 6, 2024. The LLC, in turn, was owned by an individual Debtor who had filed a Chapter 13 case on August 4, 2024, two days before the foreclosure sale. The dispute centered on the fact that the LLC had been administratively dissolved by the Georgia Secretary of State in October 2022 and was still administratively dissolved on the date the Order was entered. Debtor argued that because the LLC was administratively dissolved, the real property became part of the Debtor’s Bankruptcy estate and the foreclosure sale was stayed.

The question posed by this case is easy to state. Does the sole owner of an administratively dissolved Georgia limited liability company have an interest in real property that was at all times titled in the name of the limited liability company that is sufficient to render the real property “property of the estate” under Section 541 of the Bankruptcy Code such that the property cannot be foreclosed upon after the owner files for bankruptcy without violating the automatic stay of Section 362(a) of the Bankruptcy Code? The answer, although requiring a bit of explanation, is similarly easy to state. No, he does not.

Judge Basier noted that Georgia law expressly provides that “[a] limited liability company administratively dissolved continues its existence…” O.C.G.A § 14-11-603(b)(3).

[T]he remainder of O.C.G.A § 14-11-603 makes clear the “administrative dissolution” is a temporary state that is intended to be resolved by the dissolved entity curing the matters that led to its dissolution.6 This is apparent because the limited liability company is given five (5) years to seek “reinstatement,” O.C.G.A § 14-11-603(b)(4), and during that lengthy period its exclusive right to use its name is maintained notwithstanding its purported “dissolution.” O.C.G.A § 14-11-603(b)(6). It is further apparent because, in cases where reinstatement occurs, the limited liability company is treated “as if the administrative dissolution has never occurred.” O.C.G.A. § 14-11-603(b)(4). Based on the foregoing, it is simply incorrect to say that the LLC “no longer exists,” such that it could no longer be the owner of the Property.

A member in an LLC has no interest in specific LLC property, O.C.G.A. § 14-11-501(a), and the administrative dissolution of the LLC did not create any new rights of a member. Further, “[n]o evidence was presented that the Debtor took any action during the almost two (2) years he claims that the LLC did not exist to transfer record title to the Property to himself, which would have required the execution of a deed by the LLC in his favor and the recordation of that deed in the real property records. None of that was done. Instead, the Debtor continued to treat the LLC as if it existed and owned the Property.”

The Court concluded that the Debtor did not have an interest in the real property, and the property was not property of the Bankruptcy estate. Therefore, the foreclosure sale was not stayed by Section 362.

Judge Coleman – Vehicle Cannot Be Exempted as Tool of Trade

By Scott Riddle Posted in Consumer Bankruptcy Guide, Northern District Cases

In In re Cady, Ch. 7 No. 24-41026-ejc, 2025 WL 1587266 (Bankr. S.D. Ga. June 4, 2025) the issue was whether the Debtor, a real estate agent, could claim an exemption in her vehicle as a tool of the trade. In addition to claiming vehicle and wild card exemptions, Debtor argued that her vehicle was integral to her occupation and, therefore, qualified for an additional exemption pursuant to O.C.G.A. §44-13-100(a)(7). This subsection allows a debtor to exempt:

(7) 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.

Judge Coleman noted that there was a split of authority in Georgia Bankruptcy Courts. In Curry v. Dial Fin. Corp. (Matter of Curry), 18 B.R. 358 (Bankr. N.D. Ga. 1982), Judge Kahn held that a vehicle could never be a tool of the trade as the Georgia exemption statute “contemplates that the [debtor] uses the tool with his hands, and that the [debtor’s] work requires some degree of manual skill.” Judge Bihary followed this reasoning in Conerton v. Wachovia Bank (In re Conerton), No. 03-62155, 2004 WL 5846767 (Bankr. N.D. Ga. Jan. 13, 2004) (Bihary, J.) See also Mitchell v. First Franklin Fin. Corp. (In re Mitchell), No. 17-68428-PMB, 2018 WL 1442256 (Bankr. N.D. Ga. March 21, 2018) (Baisier, J.) (vehicle is incidental to, but not an integral part of, debtor’s work as a law clerk who travels to meet clients). Other Courts have allowed the exemption under certain circumstances. Schneider v. Fidelity Nat’l Bank, 37 B.R. 747 (Bankr. N.D. Ga 1984) (Norton, J.) (allowing an exemption for a traveling salesman when travel was the essence of his occupation).

The Judge reviewed the statutory text and definitions of “tools” and “trade,” but did not find them dispositive. He then reviewed the exemption statute as a whole, finding it “noteworthy that the Georgia exemption statute has separate exemptions for motor vehicles (O.C.G.A. § 44-13-100(a) (3)) and for tools of the trade (O.C.G.A. § 44-13-100(a)(7)).” Finding that was also not dispositive, the Court reviewed, in detail, the history of the exemption. Ultimately, Judge Coleman agreed with Judge Kahn’s reasoning in Curry.

[I]n Georgia a tool of the trade is an implement used by a person in that person’s work. Tools of the trade may be far more sophisticated today than they were when the Supreme Court of Georgia considered the question, but the term still contemplates that the person uses the tool with his hands, and that the person’s work requires some degree of manual skill.

This interpretation is only bolstered by the statute’s grouping of tools of the trade with implements and professional books, by the separate motor vehicle exemption, and by the relatively low dollar amount of the tools-of-the-trade exemption. Bringing together these disparate threads, the Court finds that the Debtor cannot exempt her BMW as a tool of her trade as a realtor under O.C.G.A. § 44-13-100(a)(7).

Thus, at least in the Southern District in Judge Coleman’s Court, a debtor cannot claim an exemption in a vehicle as a tool of the trade.

Homestead Exemption: Double Exemption Available Where Debtor Does Not Have Sole Ownership Of Residence

By Scott Riddle Posted in Georgia State Cases, Middle District Cases, Northern District Cases, Southern District Cases

In In re Antman, 2024 WL 4786241, Ch. 13 Case No. 23-60317-ejc (Bankr. S.D. Ga. Nov. 14, 2024), the debtor’s father died in 1996 and in his will left his house to debtor and her three siblings in equal shares. Debtor and her husband had lived in the house since 1999. Debtor filed a Chapter 13 case in 2023 and claimed a $43,000 homestead exemption (the “double exemption”) in the house pursuant to OCGA §44-13-100(a)(1). The Trustee objected to the exemption, arguing that she was only entitled to the $21,500 exemption because she only held a partial ownership interest in the house.

Section 44-13-100(a)(1) provides that a debtor may exempt: “(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.”

The Trustee’s objection hinged on the argument that the title to the house was not in “one of two spouses who is a debtor;” rather, the debtor only owned a fractional interest with her siblings.

Here, the Debtor has claimed a $43,000.00 double exemption in the real property devised to her, and to her three siblings, by their late father. The Trustee does not dispute that the Debtor uses the property as her residence. Nor does he dispute that the Debtor is entitled to a $21,500.00 homestead exemption. Instead, the Trustee makes essentially two arguments. First, he argues that the plain language of the Georgia exemption statute prevents the Debtor from claiming the double exemption because she has only a partial ownership interest in the residence. Second, he argues that the purpose of the double exemption statute—which, he says, is to protect a debtor’s non-filing spouse’s equitable interest in a residence—is not implicated here because the Debtor’s husband has no equitable interest to protect… Thus, the question before the Court is whether O.C.G.A. §44-13-100(a)(1) requires sole ownership of the homestead or permits a debtor with only a partial interest to claim the double exemption.

Judge Coleman disagreed with the Trustee and held that the statute did not require that the property be titled solely in a debtor’s name to trigger the double exemption.

Don’t Pay Fact Witnesses (With a Surprising Bankruptcy Twist)

By Scott Riddle Posted in Corporate & Fiduciary Litigation, Miscellaneous Cases, News and Comments

I am straying off the strict topic of Bankruptcy law and into an area of general litigation and attorney ethics that has come up in one of my pending cases. When it is OK for a lawyer to pay, or offer to pay, a witness in a pending case? The common sense answer that probably comes to mind immediately is “never.” Then we might consider some exceptions for witness fees and expenses that may be required by applicable law and expert fees and expenses. Other payments are far more questionable. Read until the end of this long-winded post for a very common Bankruptcy scenario that may surprisingly run afoul of the ethical rules and federal criminal law.

In my case, we are litigating against a law firm and their client in Bankruptcy Court. The law firm is also acting as counsel in the litigation, thus making them lawyers, parties and witnesses for themselves and their client. The law firm also has an agreement with their client to pay any award of damages or sanctions that may be assessed against him in the case. Thus, they have an agreement to pay a client/co-party/witness whose testimony also bears upon the firm’s own potential liability.