Filing for bankruptcy in Tennessee starts with understanding current Tennessee bankruptcy laws. These laws protect your assets from being gobbled up by your creditors while you enter bankruptcy.

Bankruptcy Exemptions

Under Tennessee bankruptcy laws, certain assets are protected from your creditors after you file bankruptcy. These are as follows:

• Homestead exemption of $5,000, increasing to $7,500 for joint owners and $25,000 if there is a dependent minor child
• Bible
• Schoolbooks
• Portraits
• Pictures
• Clothing
• Storage containers
• Up to one acre for a burial plot
• Health aids
• Up to $5,000 in proceeds form homeowner’s insurance
• Up to $7,500 for personal injury payments
• Up to $10,000 for wrongful death payments
• Lost earnings payments
• Up to $5,000 for crime victim’s restitution
• Accident, disability, or health benefits
• Up to $5,000 for homeowners’ insurance proceeds
• ERISA-qualified benefits
• Public benefits
• Business partnership property
• Life insurance or annuity for dependents
• Up to $1,900 for tools of the trade
• 75 percent of earned but unpaid wages, with $2.50 per week additional for each child younger than 16
• Personal property up to $4,000

Tennessee does not have a specific exemption for your car, but you can use the personal property exemption for it. If you still have a loan on your car but wish to keep it and maintain the payments, you must reaffirm the debt with the lender within 45 days of the 341 meeting.

Chapter 7 Bankruptcy Information

Chapter 7 bankruptcy protection is the “traditional” form of bankruptcy. Under Chapter 7, your assets are sold to repay as much as possible of your debt, then you receive a “clean slate.” Most debts are erased and you can start over. Chapter 7 bankruptcy is available to those who pass a means test, which compares their income to that of rest of the state. It must be at or below the median level.

Chapter 13 Bankruptcy Information

If you cannot file Chapter 7, consider Chapter 13. This form of bankruptcy does not eliminate debts right away. Rather, it allows you to keep assets while working on a court-supervised repayment plan. For many, this buys them a little time to try to get their finances back in order before losing their valuable assets.