When you are considering personal bankruptcy in Tennessee, it is important to learn about bankruptcy exemptions, and how they will be applied. Bankruptcy exemptions are applicable in different bankruptcy proceedings including Chapter 7, Chapter 11, and Chapter 13 bankruptcy cases. In short, bankruptcy exemptions are laws that allow debtors to protect certain types of assets when they file for bankruptcy. There are both federal bankruptcy exemptions and state bankruptcy exemptions. Some states permit debtors to choose between federal or state bankruptcy exemptions, but filers in Tennessee are normally required to use Tennessee bankruptcy exemptions in a bankruptcy case. Our Tennessee bankruptcy attorneys can provide you with more information about exemptions and how they work.
How Bankruptcy Exemptions Work
How do bankruptcy exemptions work in different types of bankruptcies? Let’s focus on Chapter 7 and Chapter 13.
In a Chapter 7 bankruptcy, exemptions allow debtors to keep assets that will not have to be liquidated in their bankruptcy case. When a debtor files for Chapter 7 bankruptcy, all nonexempt assets can be liquidated in order to repay creditors and if the creditors are not paid in full often the goal is to discharge the remaining debts. Debtors may worry that they will lose all of their assets, but this is where bankruptcy exemptions come in. There are many different types of exemptions that allow debtors to keep a wide range of assets, from equity in a home to multiple kinds of personal property. If an asset is exempt, then the expectation is that it will not be liquidated, and the debtor can keep that property after the bankruptcy case. In a Chapter 13 case, non-exempt assets can be retained by the debtor instead of liquidated through a reorganization plan that typically lasts from three to five years. In determining the amount of the monthly payment on the repayment plan, the debtor is required to repay at least the net value of non-exempt property that is being retained.
Commonly Used Bankruptcy Exemptions Under Tennessee Law
Tennessee law has a wide range of bankruptcy exemptions, and it will be important to speak with a bankruptcy lawyer about the particular exemptions that may be applicable to your case. Here are some examples of exemptions used in Tennessee:
- Homestead exemption, which allows a homeowner to exempt up to $35,000 of equity in a
residence for a single owner in an individual case (the amount can increase depending on
the ownership structure);
- Personal property exemption, which allows debtors to exempt up to $10,000 in any asset
or assets of their choosing other than real estate;
- Clothing exemption, which allows the debtor to exempt the clothing;
- Family photos are exempt;
There are many other exemptions, as well, that may be applicable to your case.
Seek Advice from Our Middle Tennessee Bankruptcy Lawyers
Do you have questions about bankruptcy exemptions, or do you need assistance with your bankruptcy case? A Tennessee bankruptcy lawyer at our firm is here to help. We serve all of Middle Tennessee’s bankruptcy needs with offices in Nashville, Tennessee, and Cookeville, Tennessee. Contact Lefkovitz & Lefkovitz online at www.lefkovitz.com or call us at our Nashville office (615-256-8300) or our Cookeville office (931-528-5297) today