Bankruptcy exemptions protect the equity in your property from creditors and the bankruptcy court—preventing the equity from being used to pay your creditors. Equity is the value of property after you subtract the amount of any liens against the property from its fair market value.

The equity in your home is one such asset in bankruptcy. And bankruptcy exemptions—including the homestead exemption—allow you to protect the property you will need to maintain a home and employment after bankruptcy.

Bankruptcy exemption amounts vary by state, so the amount you will be able to protect will depend on where you live and the type of bankruptcy you file (Chapter 7 or Chapter 13).

In Tennessee, bankruptcy exemptions play a crucial role in both Chapter 7 and Chapter 13 bankruptcy filings. These exemptions allow individuals to keep certain property from being liquidated or claimed by creditors. The homestead exemption in Tennessee specifically protects a certain amount of equity in your primary residence. As of the knowledge cutoff in 2023, for individual filers, the homestead exemption amount is up to $5,000 in equity for non-elderly and non-disabled individuals, $25,000 for individuals who are either 62 years of age or older, or who are physically disabled, and $12,500 for all other owners. For joint filers, these amounts can be doubled. Additionally, Tennessee offers other exemptions that can protect personal property, such as clothing, health aids, certain public benefits, and tools of the trade. It's important to note that exemption amounts are subject to change, and an attorney can provide the most current information and advice tailored to an individual's specific situation.