- Posted by Dan
- On February 25, 2011
- 0 Comments
- "Chapter 13", bankruptcy, Chapter 7, exemptions
The New 10k Exemption for Personal Property
The purpose of bankruptcy is to take care of your debts by liquidating your assets. In case of Chapter 7, most of the assets and properties are exempted under Federal or State law. Although, there is a federal exemption law in the US, most states have their own State laws which they follow. Fortunately, Tennessee is one of those states. A law passed on 5th April, 2010 increases the limit of exempt personal property from 4k to 10k, and this law became effective from July 2010. This means that people of Tennessee can now save $10000 worth of personal property from their creditors. This will aid the financial rehabilitation of those who file for bankruptcy due to any reason.
What are Bankruptcy exemptions?
During extreme financial crises, filing for bankruptcy becomes the safest option to avoid a complete collapse. Like most of the other states, people in Tennessee also file for Chapter 7 Bankruptcy. This allows them to declare their property and assets as exempt. When the law approves an asset as exempt, that means the person can have complete ownership of that asset.
However, there is a limit to define how much of an asset can be exempt. Assets and properties exceeding those limits are often liquidated and the amount is paid to the creditors. Listing all of your assets and properties as exempt is really important as any property that is not exempt can be sold by the bankruptcy trustee.
Who can benefit from this exemption?
Any one who has been a resident of Tennessee for two years can benefit from the Tennessee exemptions. By law, a permanent resident of Tennessee is a person, who has a permanent Tennessee address and holds some other official record such as a permanent driver license.
Which assets can be exempt in Tennessee?
Personal properties of up to $10000 are now exempt according to the new 10k exemption in Tennessee. This means you can select your personal properties within this limit and keep it with yourself. These personal properties also include money and funds deposits in banks.
Some of the personal properties are 100 percent exempt as they are items that cannot be sold or are difficult to sell. These may include books, bibles, portraits, family pictures, etc.
Although the exemption is also allowed on other assets such as insurance, government benefits, personal injury awards, personal property is what most people want to retain the most. An experienced bankruptcy attorney can help you evaluate and fully use your exemptions.
Since its regulation, many people of Tennessee have taken advantage of this 10k exemption and are now heading towards a better financial position with a fresh start.