Chapter 7 bankruptcy benefits many people by erasing much of their debt. However, the bankruptcy process requires debtors to give up non-exempt property for the bankruptcy trustee to liquidate to pay priority creditors. Many consumers hesitate to file a Chapter 7 case because they worry that they will lose all their property as a result of their case.
It is important to realize that the law provides exemptions for Chapter 7 filers to apply to protect their property and assets from liquidation. Each state has its own laws regarding bankruptcy exemptions, and some states allow you to use federal exemptions. In Tennessee, you must use state exemptions, and married couples can double the exemptions. These include the following, among others:
- $5,000 of equity in your home (or more for certain situations)
- Certain personal property, including health aids, specific books, family photos, clothing, and some legal judgments for injuries or wrongful death
- $1,900 worth of tools of the trade
- Public benefits
- Retirement accounts and pensions
- Insurance benefits
- Some educational savings
- Recent child support or alimony payments
- $10,000 in “wildcard” exemptions, which many people apply to a motor vehicle
In many situations, filers can apply exemptions to protect all of their property and assets, which is called a “zero-asset” or “no-asset” bankruptcy. In such cases, you only receive the benefits of a debt discharge without having to give up anything at all.
Consult with a Bankruptcy Lawyer in Memphis Today
An experienced Memphis bankruptcy attorney can review your property and apply exemptions in the best way to protect as much of your property and assets as possible. If you are considering Chapter 7 bankruptcy, you should consult with the Hurst Law Firm, P.A., about your options right away. Call 901.725.1000 or contact us online for your free consultation.