If you are scared about losing everything you own to a Tennessee bankruptcy, take a deep breath and prepare for some good news. Filing and eventually being approved for this type of debt relief would not cause you to lose your belongings, if you were to go about the process correctly.
The biggest myth you might have heard surrounds Chapter 7 bankruptcy. Even after an in-depth discussion — and perhaps even as a result of the complex and emotionally charged nature of those conversations — you might still have fears regarding your ability to retain your property after this type of liquidation.
It might help to think of Chapter 7 more as a limited liquidation than a free-for-all selloff. One simple analogy is that declaring Chapter 7 is like having a garage sale. You would put price tags on everything you want to sell and keep everything else in your home, away from prying eyes.
Of course, your liquidation would be much more painstaking and formal during bankruptcy than it would be if you were to sell your unwanted belongings on an open market. In the official proceedings, you would probably request that the court leave certain property out of the debt relief process. According to FindLaw, your potential exemptions include:
- Your home and vehicle
- Jewelry, furnishings and clothing
- Basically anything you deem necessary
As you might expect, the law places some limits on the amount of value you would be able to retain. After all, lenders would be unlikely to accept a process that provided them with no recompense for forgiving your debt.
Please keep in mind that, depending on your income, you might not qualify for Chapter 7 bankruptcy. As such, please do not regard this as legal advice; instead, please look at it as educational material.