Homestead laws are an important part of the Chapter 7 bankruptcy process. As a result, it is helpful for struggling consumers considering Chapter 7 bankruptcy protection in Tennessee to understand Tennessee homestead exemption laws and how they can help filing parties with concerns they may have associated with a family home during the bankruptcy process.
The way that the homestead exemption works is that it allows the filing party to declare a portion of their home as their homestead which makes it exempt from the Chapter 7 bankruptcy process. Chapter 7 bankruptcy is a personal bankruptcy protection option which allows the filing party to liquidate non-exempt assets to repay creditors. Homestead protections can exempt a portion of the filing party’s home from that process. Homestead protections can prevent the forced sale of the filing party’s home which may help alleviate some of their understandable concerns associated with protecting a family home.
In general, Tennessee homestead laws allow the filing party to designate $5,000 of worth of the property as homestead which can provide important protection for the homeowner’s home and may give them some peace of mind. If more than one filing party is subject to liability on the property, the filing parties may be able to designate $7,500 worth of the property as homestead according to Tennessee homestead laws.
Chapter 7 bankruptcy is an important protection for struggling consumers and homeowners to be aware of. Homestead exemption laws provide additional important protections for those considering bankruptcy relief but are concerned about their home.