Under bankruptcy law, debtors are permitted to claim exemptions. Exemptions allow a debtor to exempt or remove property from the bankruptcy estate to protect it making it unavailable to the trustee or creditors for liquidation. Each state has its own exemption laws; however, there are times when it is appropriate to use federal exemptions. An attorney would need to determine what set of exemptions a debtor should claim.
In Tennessee, there are exemptions for real property if it is your principal place of residence, personal property exemptions, and various other exemptions. This article strictly looks at the personal property and homestead exemptions.
Personal Property Exemption
A person may exempt $10,000.00 of personal property, so for a married couple, it would be $20,000.00. Some common personal property items include money, deposits in a bank account, household goods, firearms, animals, tax refunds and vehicles.
A debtor may exempt equity in their principal place of residence known as a homestead exemption. The amount depends on your situation. An individual can exempt $5,000.00. A married couple whose property deed is in both names can exempt $7,500.00. An unmarried individual who is sixty-two (62) years of age or older can claim a $12,500.00 homestead exemption. A married couple, one of whom is sixty-two (62) years of age or older and the other of whom is younger than sixty-two (62) years of age can exempt $20,000.00.
A married couple who are both over sixty-two (62) years of age can exempt $25,000.00 in a principal place of residence owned by one or both members of the couple. Lastly, an individual who has legal custody of a minor child can exempt $25,000.00 in a principal place of residence, and a married couple can claim a $50,000.00 exemption if the real property is owned by both debtors and used as a principal place of residence.
Our Bond and Botes locations offer a free, no obligation consultation. Claiming the correct exemptions can be very important in your case, so it is important to consult a qualified attorney to guide you correctly in the bankruptcy process.