What Property Is Retained or Lost When You File for Bankruptcy?
A persistent myth about bankruptcy is that a person will lose everything by filing bankruptcy. The truth is almost the opposite. One of the main purposes of bankruptcy is to protect assets from creditors. When handled correctly, the average individual or couple will keep almost everything.
At the law office of David F. Cannon, we provide the front-end analysis and pre-bankruptcy planning to help clients take maximum advantage of bankruptcy. The vast majority of our clients do not forfeit any property. Our attorneys identify any assets that might be vulnerable and help you decide if you can or should keep them.
Tennessee Bankruptcy Exemptions
In a Chapter 7 bankruptcy, your property is subject to being seized and sold to satisfy creditors in exchange for discharging your debts. However, most property is exempt from liquidation under the Tennessee bankruptcy exemptions:
- Homestead — Individuals can protect $5,000 in equity and married couples can exempt $7,500. Homeowners over age 62 can retain up to $25,000 (couple) in home equity. Full equity in property held as tenancy by the entirety may be exempt when one spouse files individual bankruptcy.
- Retirement — You retain 100 percent of pensions and qualified savings plans (up to $1 million).
- Personal effects — You keep clothing, health aids and other personal belongings.
- Personal property/wildcard — You can retain up to $10,000 in personal property, including equity in vehicles, bank accounts, burial plots, furniture, appliances, electronics and other possessions.
- Tools of trade — You retain tools, equipment, books and other property necessary to earning a living, up to $1,900.
- Earnings — At least 75 percent of weekly wages are protected from garnishment.
- Insurance proceeds — You retain coverage and equity from all insurance policies such as health, accident, disability and life insurance.
- Lawsuit proceeds — You are entitled to keep up to $7,500 of a personal injury settlement and $10,000 for wrongful death, plus obligations for lost future earnings.
- Domestic support — Child support and/or alimony owed to you for 30 days prior to bankruptcy is exempt.
- Public benefits — Bankruptcy will not take away your unemployment, workers' compensation, Social Security or other public assistance benefits.
Contact an Experienced Nashville Bankruptcy Exemptions Lawyer
David F. Cannon is certified as a Consumer Bankruptcy Specialist by The American Board of Certification and The Tennessee Commission on Continuing Legal Education and Specialization, and has practiced in bankruptcy law since 1991. He can explain all the statutory exemptions and your options, including Chapter 13 repayment plans, if you have significant assets or equity that are not exempt in a Chapter 7.
Based in Nashville, we serve all surrounding counties of Middle Tennessee. Call 615-800-3725, toll free at 877-696-8680, or e-mail our law office today to arrange a confidential consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
