Q: What are Bankruptcy Exemptions?
A: In a bankruptcy filing, there is a certain amount of personal property which is “exempt” or excluded from the bankruptcy estate. That means that the exempt property is not used to pay creditors. You keep all of that property.
Unlike some other states which allow you to choose between state and federal exemptions, in Tennessee you can only use state exemptions. The limit in Tennessee is $10,000.00 (aggregate) and can include include property such as your car (or your equity in a car), cash, checking accounts, or anything that fits under the limit in the general “Wild Card” category. Tennessee does not have a specific exemption for a vehicle but everybody needs one, so working it into the $10,000 “Wild Card” category is important.
There is a specific exemption for equity in a home (“Homestead Exemption”) which can vary depending on the age of the debtor and marital status.
Other items which are always exempt include : family Bible; clothing; school books; Tools of the Trade; Social Security, Worker’s Comp, Unemployment; Aid to the Blind, Aid to the Disabled; Veteran’s Benefits; Health aids; burial plots up to an acre; and many other things.
Maximizing your exemptions and classifying them properly is why it’s a good idea to contact a bankruptcy attorney.