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What is the homestead exemption?

On Behalf of | Sep 24, 2018 | Chapter 7 Bankruptcy

If you file Chapter 7 bankruptcy in Tennessee, your assets may be seized and sold to repay a portion of your debts. To ensure that you are not left without anything or any means to rebuild, the state affords you some exemptions. In Tennessee, the homestead exemption provides you protection for your home.

According to the Tennessee State Government, the current exemption for your home when you file bankruptcy is $7,500 if you are a joint owner or $5,000 if you are an individual. What this means in simple terms is that if your home is worth more than $5,000 or $7,500, it can be sold to repay your debts in a bankruptcy.

There are four other categories of debtors who have a higher exemption amount. If you fit into one of these categories, your home can be worth more. If you have custody of a minor, then you are allowed $25,000 as an individual or $50,000 as a joint owner. If you are over the age of 62 and an individual owner, you have $12,500. If you are a joint owner and the other owner is your spouse, you have a $20,000 exemption if one of you is over the age of 62, but if you are both over 62, then your exemption is $25,000.

The basic exemption for property owners was set in 1979 and 1980. The other exemptions were set in 2004, 2007 and 2009. They have not been adjusted since they were put into law. This information is for education and is not legal advice.


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