Many people avoid bankruptcy because they think they will lose everything. However, the fact is that most individuals are able to keep many of their assets during bankruptcy by using an effective legal tool known as bankruptcy exemptions.
Indeed, bankruptcy exemptions can be used to protect much of your property, everything from the clothes on your back to your home. In some cases, married couples can even double the amount of certain exemptions – meaning they can protect twice as much.
Some of the most important bankruptcy exemptions in Tennessee include:
- Personal Property Exemption: If you file for bankruptcy in Tennessee, you can still keep several different types of personal property, including family pictures/portraits, schoolbooks, bibles and all “necessary and proper” clothing for both you and your family.
- Wildcard Exemption: You can also use the wildcard exemption to protect up to $10,000 of personal property, which can be used on anything, including motor vehicles and home appliances.
- Homestead Exemption: You can protect a great deal of equity in your home during bankruptcy – ranging from $5,000 to $25,000 – although the maximum amount you can safeguard depends on your age, marital status and whether you have kids.
- Pension Exemption: All funds received from pensions and certain other retirement accounts – including 401(k)s and many IRAs – are exempt during a Tennessee bankruptcy.
- Insurance Exemption: All benefits received or payable from an insurance company are also exempt.
However, it is important to keep in mind that these are just five of the most commonly used bankruptcy exemptions in Tennessee. In fact, depending on your situation, there are other exemptions you should also be aware of. To learn more, including how to maximize your exemptions, it is best to contact an experienced bankruptcy attorney as soon as possible. A skilled lawyer can explain your legal options and help you navigate these often-confusing laws.