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What property is exempt when one files for Chapter 13?

Tennesseans who are drowning in debt and desperate to make a fresh financial start will often see Chapter 13 bankruptcy as a financial lifeline. Chapter 13 is different from Chapter 7 in that there is no liquidation, and there will be a payment plan for three to five years.

With Chapter 13, there is the opportunity for the debtor to retain certain properties, like a car or a home. With Chapter 7, most items of value will be sold to repay the creditors.

The key to a Chapter 13 is determining how much will be repaid. There will be an assessment as to how much the non-exempt property the debtor owns is worth. There will be a basic determination as to how much the creditors will receive. For debtors who are considering Chapter 13 though, it is essential to understand what properties will be exempt.

Debtors will have the ability to exempt automobiles, a family home -- also referred to as the homestead, clothing and other personal items, furniture, household items and jewelry. These are examples, but there are more items that people will have the option of retaining as part of a Chapter 13.

With non-exempt property, its total value will largely dictate the minimum amount that the debtor will be asked to repay as part of the plan. Chapter 13 is beneficial because it lets a debtor retain a home, automobile and certain items of sentimental and personal value.

People who are in financial difficulty and do not want to lose their home, car or other goods can consider a Chapter 13 bankruptcy. Before doing so, however, it is imperative to know how the process works with the repayment plan and which items will be exempt and non-exempt. Discussing a case with a legal professional who is experienced in all aspects of Chapter 13 can help.

Source:, "Exempt Property in a Chapter 13 Bankruptcy," accessed on Oct. 24, 2017

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

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