Chapter 7 bankruptcy can seem like an extreme financial process for those Tennessee residents who are struggling to find solid financial footing. Often referred to as “liquidation bankruptcy,” this form of bankruptcy requires filers to sell off items of personal property in order to come up with money that can be used to satisfy the filer’s creditors. Unlike Chapter 13 bankruptcy, which involves the repayment of debts over time with the filer’s incomes, Chapter 7 bankruptcy relies on the proceeds of the filer’s liquidations to settle their outstanding debts.

However, a Chapter 7 bankruptcy filer does not need to sell everything that they own in order to meet the terms of their chosen path to solvency. State and federal regulations provide individuals with exemptions that allow filers to protect from the bankruptcy process certain articles of property and items of value so that they are not destitute when they emerge from the bankruptcy process.

Under Chapter 7 bankruptcy, a filer may be able to protect from liquidation jewelry or other sentimental items of value. Depending upon whether the filer has elected to use the state or federal exemptions, the value of the property that they will be able to protect may vary.

In some cases a filer may also be able to use a “wildcard” exemption to protect property that does not otherwise fit into a specific exemption category. It is possible for a bankruptcy filer to keep their wedding ring, for example, through the application of an exemption, but each case should be assessed on its own merits. Bankruptcy attorneys can help their clients understand if and how the exemptions may apply in their unique bankruptcy cases.