People sometimes worry that filing for Chapter 7 bankruptcy means they’re going to lose everything. They know that it is referred to as liquidation bankruptcy, and they understand that this means they have to sell their assets to pay off a portion of what they owe. The court can then order that the rest of the debt be forgiven.
Thankfully, you’re not going to lose everything, and many people have to liquidate far fewer assets than they assume. The reason for this is that there are both state and federal exemptions. Let’s take a look at some of the exemptions offered by Tennessee.
The homestead exemption
First of all, Tennessee offers a homestead exemption that differs depending on who lives in the house. For instance, it could be $12,500 if the person is 62 years old or older, or it could be up to $25,000 for married couples in this age bracket.
Personal property exemptions
People can often exempt specific personal property such as portraits, pictures, clothing, school books, Bibles or other religious texts and things of this nature. If they have recovered compensation from a personal injury settlement, they can keep up to $7,500.
Tools of the trade
It’s important that someone who goes through bankruptcy can still work after the case has concluded, so they can exempt the tools of their profession up to $1,900.
Wildcard exemption
Finally, Tennessee offers a significant wildcard exemption of $10,000. This can be used for any personal property that the person wants to keep while filing for bankruptcy.
If you’re interested in bankruptcy to clear outstanding debt, it’s very important to know how it works and how the process will affect your finances moving forward. It can help to have the guidance of an experienced law firm at this time.
