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What is not exempt during a Tennessee Chapter 7 bankruptcy

Tennesseans who have accrued large debts -- whether because of an investment gone wrong, an unexpected medical situation or something else -- have options. One option is filing for bankruptcy. Doing so can lead to a fresh financial start.

But, bankruptcy is not necessarily the painless, get-out-of-jail-free card that some may think it is. When a person files for bankruptcy, they will generally need to take significant steps towards paying their creditors. What those steps look like and how long they will take depends on the form of bankruptcy a person chooses to pursue.

For a Chapter 7 bankruptcy, a person will often have to sell off a sizeable chunk of their assets. But not all assets need to be liquidated. Bankruptcy law allows for certain exemptions. Knowing which property is exempted and which is not is essential to maximizing the benefit of filing for bankruptcy.

As a general rule, bankruptcy exempts items that are necessary to modern life. The reason is that bankruptcy aims to get people back on their feet and contributing to society. Forcing individuals to sell-off necessities would run counter to bankruptcy's purpose. As a result, a person will not need to sell-off clothes (up to a point), transportation (up to a certain value), appliances, tools of their trade and so on.

Items not classified as necessities will have to be sold off. These include second cars, second home, family heirlooms, collector's items and financial instruments, like stocks, bonds and other investments.

Tennesseans interested in learning more about Chapter 7, exemptions and other bankruptcy topics may benefit from speaking with an experienced bankruptcy attorney.

Source: FindLaw.com, "Exempt vs. Non-exempt Property Under Chapter 7," accessed on Dec. 1, 2015

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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