Many people worry about filing for Chapter 7 bankruptcy, as it is commonly called the “liquidation bankruptcy.” This means the bankruptcy trustee has the right to seize some of your assets and property to liquidate and make payments to certain creditors before the discharge of your debts. However, this does not mean you will lose your house and everything you own in your Chapter 7 bankruptcy case, as the law provides many exemptions to protect property, including a homestead exemption. A Memphis bankruptcy lawyer can review your specific situation and advise how the homestead exemption will apply in your case.
The Tennessee Homestead Exemption
While some bankruptcy filers may use the federal exemptions, filers in Tennessee must use the exemptions set out by state law. Our state homestead exemption applies to real property used as your main residence, such as a house or condo, as well as to interest in a family cemetery, burial plot, or mausoleum space.
The amount of equity that is exempt from liquidation depends on your circumstances, as follows:
- A single homeowner with no dependents = $5,000
- Joint owners with no dependents = $7,500
- A homeowner with at least one minor dependent = $25,000 (can double to $50,000 for married parents with one or more dependents)
- A single homeowner age 62 or older = $12,500
- A married couple with one owner younger than 62 and one owner at least age 62 = $20,000
- A married couple with both spouses at least age 62 = $25,000
Discuss Your Options with a Bankruptcy Lawyer in Memphis
At the Hurst Law Firm, we can advise how much equity you can protect in your home, as well as how other exemptions can help you in your Chapter 7 case. Learn how our Memphis bankruptcy attorney can help by calling 901.725.1000 or contacting us online today.