Bankruptcy Building Blocks: What are Exemptions?

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					                This is an excerpt from the




    CONSUMER’S GUIDE TO
       BANKRUPTCY

                 IN THE FULL GUIDE YOU WOULD GET:

        A basic understanding of the 2 main types of consumer bankruptcy,
        valuable insights into evaluating bankruptcy as a debt reduction tool,
          and practical guidance for finding a quality bankruptcy attorney.

                                 Topics covered:

-   An overview of the bankruptcy process.
-   Key bankruptcy terms like: “discharge,” “automatic stay,” and “exemptions.”
-   Chapter 7 bankruptcy: what it is, how it works, and when it is preferred.
-   Chapter 13 bankruptcy: what it is, how it works, and when it is preferred.
-   How bankruptcy can save a home from foreclosure or a car from repossession.
-   5 good reasons to file bankruptcy.
-   5 good reasons not to file bankruptcy.
-   3 alternatives to filing for bankruptcy.
-   5 questions to ask when interviewing a prospective bankruptcy attorney.




          Want a free copy of this guide?
       Just send an email to bkguide@llgtn.com and look for it in your inbox!
                                 WHAT ARE EXEMPTIONS?




Exemptions	
  are	
  the	
             THE MYTH
                                       	
  
laws	
  that	
  shield	
  a	
          One	
  of	
  the	
  most	
  common	
  misconceptions	
  about	
  
debtor’s	
  assets	
  from	
           bankruptcy	
  is	
  that	
  you	
  lose	
  everything	
  you	
  own	
  when	
  
their	
  creditors	
  and	
            you	
  file.	
  	
  For	
  the	
  vast	
  majority	
  of	
  consumers,	
  this	
  is	
  
permit	
  debtors	
  to	
              simply	
  not	
  true.	
  	
  In	
  2010,	
  there	
  were	
  1.139	
  million	
  
retain	
  property	
  after	
          Chapter	
  7	
  bankruptcies,	
  and	
  less	
  than	
  6%	
  of	
  these	
  case	
  
the	
  conclusion	
  of	
  their	
     resulted	
  in	
  a	
  debtor	
  losing	
  assets.	
  	
  	
  	
  
bankruptcy.	
  
	
                                     THE TRUTH

                                       How	
  is	
  this	
  possible?	
  	
  Well,	
  first	
  off,	
  the	
  purpose	
  of	
  
                                       bankruptcy	
  is	
  not	
  to	
  punish	
  you	
  for	
  your	
  past.	
  	
  Second,	
  
                                       when	
  you	
  come	
  out	
  of	
  your	
  bankruptcy,	
  you	
  need	
  to	
  
                                       retain	
  certain	
  necessities	
  of	
  life	
  in	
  order	
  to	
  make	
  the	
  
                                       most	
  of	
  your	
  fresh	
  start.	
  
                                       	
  
                                       By	
  applying	
  exemptions	
  against	
  your	
  personal	
  
                                       property	
  and	
  your	
  home,	
  you	
  shield	
  your	
  assets	
  from	
  
                                       your	
  creditors,	
  and	
  you	
  retain	
  them	
  after	
  the	
  
                                       conclusion	
  of	
  your	
  bankruptcy.	
  


                                       LIMITATIONS

                                       There	
  are	
  limitations	
  to	
  how	
  much	
  property	
  you	
  can	
  
                                       protect.	
  	
  Any	
  personal	
  property	
  or	
  home	
  equity	
  that	
  is	
  
                                       not	
  protectable	
  can	
  potentially	
  be	
  seized	
  for	
  the	
  
                                       benefit	
  of	
  creditors.	
  	
  
                                       	
  
                                       Some	
  common	
  Tennessee	
  exemptions	
  are	
  listed	
  on	
  the	
  
                                       next	
  page.	
  	
  	
  
                                                WHAT ARE EXEMPTIONS?




       YOUR PERSONAL PROPERTY                                               	
     YOUR REAL PROPERTY (HOME)
                                                                            	
  
                                                                            	
  
       	
                                                                   	
     In	
  the	
  state	
  of	
  Tennessee,	
  the	
  amount	
  
       Tennessee	
  state	
  law	
  allows	
  you	
  to	
                   	
     of	
  equity	
  in	
  your	
  home	
  that	
  you	
  can	
  
       protect	
  your	
  personal	
  property	
  to	
  a	
                 	
     exempt	
  depends	
  upon	
  your	
  age,	
  
       certain	
  degree.	
  	
  Here	
  are	
  a	
  few	
  of	
  the	
     	
     whether	
  you	
  are	
  filing	
  with	
  your	
  
       most	
  notable	
  exemptions.	
  	
  	
                             	
     spouse,	
  and	
  whether	
  you	
  have	
  minor	
  
                                                                            	
     children	
  in	
  your	
  legal	
  custody.	
  	
  
       1. $10,000	
  of	
  personal	
  property,	
                          	
     	
  
            including	
  money	
  and	
  bank	
                             	
     • If	
  you	
  are	
  any	
  age,	
  with	
  custody	
  
            accounts,	
  household	
  goods	
  and	
                        	
            of	
  minor	
  children,	
  you	
  can	
  
            furnishings,	
  jewelry,	
  firearms,	
                         	
            protect	
  $25,000	
  of	
  your	
  home	
  
            sports	
  and	
  hobby	
  equipment,	
                          	
            equity	
  if	
  you	
  file	
  by	
  yourself,	
  or	
  
            and	
  motor	
  vehicles	
  to	
  the	
  extent	
               	
            $50,000	
  if	
  you	
  file	
  with	
  your	
  
            they	
  are	
  not	
  secured	
  by	
  a	
  lien.	
  	
         	
            spouse.	
  
            	
  	
                                                          	
            	
  
       2. $1,900	
  worth	
  of	
  tools	
  of	
  your	
                    	
     • If	
  you	
  are	
  under	
  the	
  age	
  of	
  62,	
  
            trade,	
  including	
  instruments,	
                           	
            without	
  custody	
  of	
  minor	
  
            books,	
  and	
  other	
  tools	
  used	
  in	
                 	
            children,	
  then	
  you	
  can	
  protect	
  
            your	
  profession.	
  	
  	
                                   	
            $5,000	
  of	
  your	
  home	
  equity	
  if	
  
       	
                                                                   	
            you	
  file	
  by	
  yourself,	
  or	
  $7,500	
  if	
  
       3. 100%	
  of	
  Health	
  Savings	
                                 	
            you	
  file	
  with	
  your	
  spouse.	
  
            Accounts,	
  401ks,	
  IRAs,	
  pensions,	
                     	
            	
  
            and	
  other	
  qualified	
  retirement	
                       	
     • If	
  you	
  are	
  over	
  the	
  age	
  of	
  62,	
  
            plans.	
                                                        	
            without	
  custody	
  of	
  minor	
  
            	
                                                              	
            children,	
  then	
  you	
  can	
  protect	
  
       4. 100%	
  of	
  Social	
  Security,	
                               	
            $12,500	
  of	
  your	
  home	
  equity	
  if	
  
            Disability,	
  and	
  workers’	
                                	
            you	
  file	
  by	
  yourself	
  or	
  $20,000	
  
            compensation	
  benefits.	
                                     	
            (if	
  only	
  one	
  of	
  you	
  is	
  over	
  the	
  age	
  
                                                                            	
            of	
  62)	
  or	
  $25,000	
  if	
  you	
  file	
  with	
  
                                                                            	
            your	
  spouse	
  (and	
  both	
  of	
  you	
  are	
  
                                                                            	
            over	
  the	
  age	
  of	
  62).	
  	
  
                                                                            	
  
                                                                            	
  
	
  
3                         Got a question about your situation or something you read in this guide?
                            Feel free to email me at bkguide@llgtn.com, call me at 615-807-1064,
                                            or visit the website at www.llgtn.com.
                                                    ABOUT THE AUTHOR


	
  

                                                     GORDON BOUTWELL is	
   a	
   bankruptcy	
   and	
   consumer	
  
                                                     protection	
   attorney	
   in	
   Franklin,	
   Tennessee.	
   	
   He	
   has	
  
                                                     practiced	
   law	
   since	
   2006,	
   with	
   most	
   of	
   that	
   time	
  
                                                     dedicated	
   to	
   bankruptcy,	
   personal	
   finance,	
   and	
  
                                                     consumer	
  advocacy.	
  	
  	
  
                                                     	
  
                                                     Over	
  the	
  years	
  he	
  has	
  helped	
  hundreds	
  of	
  individuals,	
  
                                                     couples,	
  and	
  families	
  with	
  their	
  financial	
  problems.	
  	
  He	
  
                                                     believes	
   in	
   treating	
   other	
   people	
   the	
   way	
   he	
   would	
  
                                                     want	
   to	
   be	
   treated	
   in	
   the	
   same	
   situation.	
   	
   He	
   takes	
  the	
  
                                                     time	
  to	
  get	
  to	
  know	
  his	
  clients,	
  and	
  he	
  educates	
  them	
  
                                                     on	
  their	
  options	
  for	
  getting	
  out	
  of	
  debt,	
  helping	
  them	
  to	
  
                                                     understand	
  and	
  evaluate	
  them.	
  	
  	
  	
  	
  
                                                     	
  
                                                     He	
   believes	
   bankruptcy	
   is	
   a	
   worthwhile	
   tool	
   to	
   help	
  
	
                                                   some	
   (but	
   not	
   all)	
   people	
   get	
   out	
   of	
   debt,	
   and,	
   when	
  
	
                                                   combined	
  with	
  financial	
  education	
  and	
  counseling,	
  can	
  
                                                     be	
  a	
  springboard	
  to	
  financial	
  independence.	
  	
  	
  
                                                     	
  
       Gordon	
  H.	
  Boutwell,	
  Atty	
           In	
   March	
   2011,	
   Gordon	
   and	
   R.	
   Keith	
   Gordon	
   formed	
  
       Lodestone	
  Legal	
  Group	
                 the	
   Lodestone	
   Legal	
   Group	
   in	
   Franklin	
   Tennessee,	
  
       198	
  E.	
  Main	
  St.,	
  Ste.	
  4	
      with	
   the	
   purpose	
   of	
   assisting	
   business	
   and	
   private	
  
       Franklin,	
  TN	
  37064	
                    clients	
  by	
  exploring	
  legal	
  options,	
  navigating	
  the	
  legal	
  
       615-­‐807-­‐1064	
                            pitfalls,	
   and	
   providing	
   measurable	
   results	
   through	
  
       bkguide@llgtn.com	
                           custom	
  solutions	
  and	
  a	
  commitment	
  to	
  the	
  lost	
  art	
  of	
  
       www.llgtn.com	
                               personal	
  care	
  and	
  client	
  service.	
  
       	
                                            	
  
       	
                                            Lodestone	
   Legal	
   Group	
   practices	
   in	
   the	
   areas	
   of	
  
       	
  
                                                     bankruptcy,	
  debt	
  negotiation	
  and	
  settlement,	
  financial	
  
                                                     counseling,	
   residential	
   and	
   commercial	
   real	
   estate,	
  
                                                     estate	
   planning	
   (wills	
   and	
  trusts),	
   and	
  small	
   business	
  
                                                     and	
  corporate	
  law.	
  	
  	
  
                                                     	
  
                                                     	
  
                                                     	
  
                                                     	
  	
  	
  	
  	
  	
  
4                         Got a question about your situation or something you read in this guide?
                            Feel free to email me at bkguide@llgtn.com, call me at 615-807-1064,
                                            or visit the website at www.llgtn.com.

				
DOCUMENT INFO
Description: Exemptions are the laws that shield a debtor’s assets from their creditors and permit debtors to retain property after the conclusion of their bankruptcy.