In Tennessee and all over the country, individuals and families are struggling to get back on their feet following the unprecedented world events that cost many jobs and closed many businesses. Additionally, some may be dealing with related medical bills or other extraordinary expenses. Those who have emergency funds know they only stretch so far. The thought of filing for Chapter 7 bankruptcy may be on some minds, but they may be wondering whether any bankruptcy exemptions apply to their circumstances.
At the beginning of the bankruptcy process, the applicants will complete a thorough and honest inventory of their assets, and the trustee generally accepts this inventory as truthful. In other words, he or she will not usually search one’s home to see if there are assets hidden in the closets. Since the goal is not to leave anyone destitute, the following items are generally exempt from liquidation:
- The applicant’s home
- One vehicle, usually the one of lesser value
- Certain equipment or tools for work
- Regular clothing for everyday use
- Retirement accounts
- Other items an applicant may require to live or work
Those items that are likely to be sold by the trustee include a second home or vacation home, artwork, jewelry, valuable collections, musical instruments and expensive clothes. Federal law does allow those who are filing for Chapter 7 to protect some assets up to a certain dollar value. However, if an applicant who does not have these kinds of assets to sell, it simply means his or her creditors will not receive any part of the debt the person owes.