Bankruptcy Exemptions in Tennessee

Tennessee has opted out of the federal bankruptcy exemptions. State law declares Tennessee's exemptions adequate and says Tennessee citizens are not authorized to claim the federal exemptions in 11 U.S.C. § 522(d); Tennessee residents use Tennessee exemptions.

An individual may exempt up to thirty-five thousand dollars ($35,000) of real property owned and used by the individual, spouse, or dependent as a principal residence. Joint owners who both use the property as their principal residence may claim a combined total of up to fifty-two thousand five hundred dollars ($52,500), divided equally if claimed in the same proceeding (if only one joint owner is in the proceeding, that person's exemption is $35,000). The exemption does not apply against property taxes, purchase-money debt for the home or its improvements, or a debt secured by the home where the exemption was waived in a written contract. The statute sets no acreage limit.

Tennessee has no separate motor vehicle exemption. A vehicle can be protected only within the general personal property exemption of up to ten thousand dollars ($10,000) of the debtor's equity in personal property of the debtor's choosing. A vehicle used as a tool of the debtor's trade might instead fall within the tools-of-the-trade exemption (up to one thousand nine hundred dollars ($1,900) in implements, professional books, or tools of the trade).

A bona fide Tennessee resident may select personal property of the debtor's choosing, including money and funds on deposit in a bank or other financial institution, up to an aggregate of ten thousand dollars ($10,000) of the debtor's equity interest. Items bought or maintained with fraudulently obtained funds are not eligible. This applies to personal property only.

Funds or other assets payable from, or a participant's or beneficiary's interest in, a retirement plan qualified under Internal Revenue Code §§ 401(a), 403(a), 403(b), 408, or 408A (including IRAs and Roth IRAs), an Archer medical savings account, or a health savings account are exempt from all creditors' claims except the state's, and except an alternate payee under a qualified domestic relations order. Pensions from the state or a Tennessee political subdivision are exempt before and after receipt, except for support assignment orders and qualified domestic relations orders. Payments from other (non-qualified) pension, annuity, and similar plans on account of death, age, or length of service are exempt to the same extent as wages, with conditions.

Tennessee's exemption statutes have no separate exemption for earned but unpaid wages in bankruptcy. Tennessee's wage garnishment limit allows no more than the lesser of 25 percent of weekly disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum hourly wage to be garnished. Earnings include wages, salary, commissions, bonuses, and periodic pension payments.