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Can you keep your home in a Chapter 7 bankruptcy?

When Tennessee residents are having a difficult time financially, they may not know how to get ahead of their debt. In many cases, turning to Chapter 7 bankruptcy can provide a good solution. In a Chapter 7 bankruptcy, many residents can see all of their consumer debt erased. Without this debt, people can get the fresh financial start they desperately need.

However, as many people know, Chapter 7 bankruptcy is a liquidation bankruptcy. This means that a person's personal property is sold to pay a portion of their debts. Any remaining debt is then discharged.

Some residents may be hesitant to file for Chapter 7 bankruptcy out of fear of losing their home. However, people need to understand that bankruptcy exemptions apply when filing for Chapter 7 bankruptcy. An exemption allows a debtor to keep a certain amount of the person's property.

In Tennessee, a homestead exemption may allow some people to keep their homes despite filing for Chapter 7 bankruptcy. Under Tennessee laws, individuals may keep up to $5,000 in equity in a homestead. If more than one debtor is filing together -- typically a married couple -- they may keep up to $7,500 in equity in a homestead.

Older debtors can keep even more value in their homes. For people over the age of 62, Tennessee laws allow them to keep $12,500 for an individual and up to $25,000 for a married couple -- if both are over the age of 62. If only one spouse is over the age of 62, then the couple may keep $20,000 of equity in their home.

It is important for Tennessee residents to understand how bankruptcy exemptions can work for them. With the proper use of bankruptcy exemptions, many Tennessee residents can keep much of their personal property, including their home.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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