Bankruptcy exemptions are intended to allow debtors to keep some of their property when they elect to file for bankruptcy. Exemptions can be particularly important to debtors who choose to pursue Chapter 7 bankruptcy, which is often referred to as “liquidation bankruptcy”. In Chapter 7 bankruptcy, a person is required to sell off items of property in order to attain money to pay off their creditors.
Exemptions can apply to debtors’ homes, vehicles and even items of personal property. A debtor may be able to exempt certain pieces of property that they use to do their jobs and earn money; it does not serve a person in financial peril to lose what they need to earn a living so some work-related tools may be exempt from a bankruptcy estate.
However, in the process of filing for bankruptcy a debtor may find that certain sentimental or personally important items do not fit into any of the established exemption categories. They may face an emotionally process when trying to find a way to protect important items of personal property. In Tennessee, individuals may be able to use the wild card exemption to protect just these assets. A person may exempt up to $10,000 worth of property under the wild card exemption, though any property that was paid for with fraudulently acquired funds may not be protected.
Making one’s exemptions work to their fullest can be a tricky undertaking. Working with a trusted bankruptcy attorney is a good way for a person to use their exemptions and achieve bankruptcy discharge so that they have a solid financial future.
