Tennessee Bankruptcy Exemptions: What You Get to Keep

If you file bankruptcy in Tennessee, you must use Tennessee's state exemptions plus the federal non-bankruptcy exemptions—Tennessee is an "opt-out" state and does not let you choose the federal bankruptcy exemption list found in 11 U.S.C. § 522(d). That single rule, set by Tenn. Code Ann. § 26-2-112, shapes everything else. Tennessee's homestead exemption used to be one of the stingiest in the country, and a great deal of outdated advice online still says so. It isn't anymore: since January 1, 2022, the homestead protects $35,000 of equity for an individual and $52,500 for people who jointly own the home. On top of that sits a genuinely flexible $10,000 personal-property wildcard you can apply to almost anything, including a car. Knowing how these pieces fit together is the difference between keeping your property and watching a trustee liquidate it.

Tennessee opts out of the federal exemptions

Federal bankruptcy law gives each state a choice: let debtors pick between the federal exemption menu in 11 U.S.C. § 522(d) or require them to use the state's own exemption laws. Tennessee chose to require its own. Under Tenn. Code Ann. § 26-2-112, residents filing here may not elect the federal § 522(d) exemptions. The Tennessee Court of Appeals quoted that section directly in Boren v. Hill Boren PC (2023): Tennessee's exemptions are "declared adequate" and citizens "are not authorized to claim as exempt the property described in" § 522(d). You are limited to Tennessee's exemptions, supplemented by the federal non-bankruptcy exemptions (such as protections for Social Security and certain federal retirement and veterans' benefits) that every filer may use regardless of state.

There is also a residency rule that catches recent arrivals. Under 11 U.S.C. § 522(b)(3), you must have been domiciled in Tennessee for at least 730 days (two years) before filing to use Tennessee's exemptions. If you moved more recently, the law looks back to where you lived during the 180 days before that period. One important exception: if that look-back would send you to a state whose exemptions are limited to its own residents—leaving you with nothing—the "hanging paragraph" of § 522(b)(3) lets you use the federal § 522(d) exemptions after all. A recent arrival is not automatically stuck with no exemptions.

The homestead exemption: $35,000, and the old age and child tiers are gone

Tennessee's homestead exemption, in Tenn. Code Ann. § 26-2-301, protects equity in the real property you use as a principal residence. The amounts were rewritten by 2021 Public Chapter 301 (Senate Bill 566), signed by the Governor on May 4, 2021 and effective January 1, 2022. The act replaced "five thousand dollars ($5,000)" with "thirty-five thousand dollars ($35,000)" wherever it appeared in § 26-2-301(a), and replaced "seven thousand five hundred dollars ($7,500)" with "fifty-two thousand five hundred dollars ($52,500)." So the current amounts are:

• $35,000 for an individual filer.
• $52,500 for individuals who jointly own and use the home as their principal residence. This is a combined cap on the shared home, not $52,500 each.

The old tiers no longer exist. Section 2 of Public Chapter 301 amended § 26-2-301 "by deleting subsections (e) and (f)"—the subsections that had given larger amounts to homeowners age 62 and older ($12,500 / $20,000 / $25,000) and to a filer with a minor child in their custody ($25,000). Those numbers are repealed. If you are 62 or older, or you have a minor child, you do not get a special figure; you get the same $35,000 (or $52,500 as a joint owner) as everyone else, which in every one of those cases is more than the repealed tier gave you. Any source still publishing the $5,000 / $7,500 / $12,500 / $20,000 / $25,000 amounts is describing law that died on December 31, 2021.

These figures are equity protections—what counts is the value of your interest after subtracting any mortgage. If your equity exceeds the exemption, a Chapter 7 trustee can sell the home and return your exempt share, though a trustee will often abandon a home when the equity above the exemption would not cover the costs of sale. The practical effect of the 2022 increase is large: a homeowner with, say, $30,000 of equity who would once have been badly exposed is now fully covered, and Chapter 7 may be available where a Chapter 13 was previously the only safe route. The exemption still does not defeat public taxes, purchase-money debt on the home, or a debt secured by the homestead where the exemption was waived in the conveyance. Public Chapter 301 also raised the § 26-2-304 exemption for insurance proceeds on a destroyed homestead to $35,000.

Vehicles: there is no separate car exemption

Tennessee is unusual in that it has no dedicated motor-vehicle exemption. There is no statute that shields a set amount of car equity the way most states do—the U.S. District Court's official Claim for Exemptions form, which lists Tennessee's exemptions one by one, contains no motor-vehicle line at all. Instead, you protect a vehicle by applying part of your general personal-property exemption to it. For most filers with an ordinary car, the $10,000 personal-property allowance below is more than enough to cover the equity, especially because cars depreciate quickly and equity is calculated after any auto loan.

The $10,000 personal-property wildcard

The workhorse of Tennessee exemption planning is Tenn. Code Ann. § 26-2-103, quoted verbatim by the Court of Appeals in Boren v. Hill Boren PC: "Personal property to the aggregate value of ten thousand dollars ($10,000) debtor's equity interest shall be exempt from execution, seizure or attachment," and the debtor "may select for exemption the items of the owned and possessed personal property, including money and funds on deposit with a bank or other financial institution." This is a true wildcard—you decide what it covers. It can be applied to a vehicle, a bank account, furniture, electronics, or any mix of those. Because it is flexible, this $10,000 (or $20,000 for a married couple filing jointly, since each spouse may claim their own) does much of the heavy lifting that a car or household-goods exemption would do in other states.

Two limits are worth knowing. The exemption runs to a person "permanently residing in Tennessee," and under § 26-2-103(b) an item is not eligible if it was purchased with or maintained by fraudulently obtained funds—though a court must find that by a preponderance of the evidence before disqualifying it.

Several categories of property are protected separately, on top of the wildcard, so they do not eat into your $10,000:

• Necessary wearing apparel for you and your family and the trunks or receptacles that hold it, plus family portraits, the family Bible, and school books, under Tenn. Code Ann. § 26-2-104. Tennessee's official General Sessions summons form tells debtors these "are automatically exempt by law and do not need to be listed," and that "should any of these items be seized you would have the right to recover them."
• A burial plot or space in a mausoleum, under Tenn. Code Ann. §§ 26-2-305 and 46-2-102.
• Tools of the trade—implements, professional books, and tools of your trade or a dependent's trade, up to $1,900 under Tenn. Code Ann. § 26-2-111(4).
• Professionally prescribed health care aids for you or a dependent, under § 26-2-111(5).

Wages and bank accounts

Here the most common error in circulation is to state the 25% garnishment cap as if it were the whole rule. It is not, and the missing half is the half that protects low earners. Tenn. Code Ann. § 26-2-106, quoted in Boren, caps garnishment at the lesser of:

• 25% of your disposable earnings for that week; or
• the amount by which your disposable earnings for that week exceed 30 times the federal minimum hourly wage—"whichever is less."

The consequence matters: if your disposable earnings for the week do not exceed 30 times the federal minimum wage, the second figure is zero or negative and nothing at all can be garnished. Tennessee's official execution and garnishment form makes the employer run exactly this calculation and says, in terms: "If subdivision (b)(1)(E) is $0 or less, STOP. NO WAGES MAY BE WITHHELD." A low-wage worker is not facing an inevitable 25% bite.

Tennessee then adds a further reduction: $2.50 per week for each dependent child under 16 who resides in Tennessee (Tenn. Code Ann. § 26-2-107). The same official form gives the equivalents for other pay cycles—$5.00 if you are paid every two weeks, $5.42 semi-monthly, $10.83 monthly—and subtracts the child amount from whichever of the two caps above is lower, not merely from the 25% figure.

Two exceptions run the other way. If the judgment is for child support, or for alimony to an ex-spouse who has not remarried, the federal limits in 15 U.S.C. § 1673(b) apply instead and 50% to 65% of disposable earnings can be taken. And if the judgment is for state or federal taxes, none of these caps protect your earnings. A wage garnishment also creates a lien on your earnings that lasts until the judgment is paid or six months, whichever comes first.

Retirement, benefits, and lawsuit recoveries

Tax-qualified retirement plans get strong protection under Tenn. Code Ann. § 26-2-105—the section most write-ups on this topic never mention. It exempts funds in any plan qualified under Internal Revenue Code §§ 401(a), 403(a), 403(b), 408 and 408A (so 401(k)s, 403(b)s, traditional and Roth IRAs), plus Archer MSAs and health savings accounts, "from any and all claims of creditors," except the State of Tennessee and an alternate payee under a qualified domestic relations order. In Boren, the Court of Appeals reversed a trial court and held that a debtor's rollover IRA—including the annuities inside it—was fully exempt under § 26-2-105, even though the debtor was over 59½ and could withdraw the funds without penalty. Retirement funds also have independent protection in bankruptcy under 11 U.S.C. § 522(b)(3)(C), which applies even in opt-out states like Tennessee.

Tenn. Code Ann. § 26-2-111 protects, up to specified limits, certain recoveries: a personal-injury payment up to $7,500, a wrongful-death payment up to $10,000, and a crime victims' reparation award up to $5,000—subject to an overall $15,000 aggregate cap across those categories. Public benefits are protected too: Social Security, unemployment, Families First, local public assistance, veterans' benefits, and disability benefits under § 26-2-111(1), and workers' compensation under § 50-6-223.

How to claim and enforce your exemptions

Exemptions are not automatic (with the narrow exception of the clothing, Bible, portraits and school books noted above, which are exempt whether or not you list them). In bankruptcy, you claim them by listing each item and the statute you rely on for it on Schedule C. If the trustee or a creditor believes an exemption is improper, they must object within 30 days after the conclusion of the meeting of creditors under Federal Rule of Bankruptcy Procedure 4003(b); if no one objects in time, the exemption stands. The objecting party—not you—carries the burden of proving the exemption was improperly claimed.

Outside bankruptcy, if a creditor has already garnished or levied on you, Tennessee's official notice to judgment debtors tells you to act within 20 days of the notice: file a motion with the court clerk claiming your exemption, and the court must hear and decide it "in no event later than fourteen (14) days from filing." Missing that 20-day window does not extinguish your exemptions. The written exemption list "may be filed at any time" and may be amended later; the catch is that a list filed after the judgment becomes final will not reach an execution or garnishment that was issued before you filed it. So filing late is far better than not filing—it just may not claw back what has already gone out the door.

Where to verify Tennessee's rules

Exemption amounts change when the legislature amends the code—as the homestead did in 2021—so confirm current numbers before relying on them. Enacted Tennessee laws are published free by the Secretary of State as Public Chapters, and bills are at capitol.tn.gov; Tennessee appellate opinions that quote the exemption statutes verbatim are free at tncourts.gov. The official execution and garnishment forms from the Administrative Office of the Courts spell out the wage-garnishment math. For the bankruptcy process itself, the U.S. Bankruptcy Courts for the Eastern, Middle, and Western Districts of Tennessee publish local rules and forms. For complaints about debt collectors or creditors, contact the Tennessee Attorney General's Division of Consumer Affairs. Remember the federal backstops as well: the Fair Debt Collection Practices Act governs how collectors may contact you, and the Fair Credit Reporting Act governs how a bankruptcy is reported, no matter which state you file in.

This article is general information about Tennessee law, not legal advice, and it does not create an attorney-client relationship. Exemption planning turns on your specific facts; consider consulting a licensed Tennessee bankruptcy attorney or a nonprofit credit counselor before you file.

Official Tennessee Sources

This page is based on Tennessee law. Limits and deadlines change — verify the current details directly with the official Tennessee sources below. This is general legal information, not legal advice.

• Tennessee Attorney General's Office - Division of Consumer Affairs — official Tennessee agency.
• File a Complaint - Tennessee Division of Consumer Affairs

Federal law also applies. Federal laws like the Fair Debt Collection Practices Act and Fair Credit Reporting Act protect you nationwide, on top of Tennessee’s own rules.