Bankruptcy in Tennessee

Filing for bankruptcy in Tennessee means navigating both federal law and Tennessee's own exemptions — which you must use because Tennessee opted out of the federal exemption scheme. This hub explains Chapter 7, Chapter 13, and which assets you can protect.

By Find Local Law Editorial Team · Last reviewed: May 26, 2026

Researched and drafted with AI assistance and verified against primary sources (statutes, Judicial Council forms, and official court websites). This is general information, not legal advice.

Disclaimer: This page is general legal information, not legal advice. Bankruptcy law is complex and fact-specific. Consult a licensed Tennessee bankruptcy attorney before making any decisions about filing.

Tennessee Bankruptcy: What Makes It Different

Bankruptcy is a federal process governed by Title 11 of the U.S. Code, but one critical element — the exemptions that protect your property — is determined by state law. Tennessee is an opt-out state under T.C.A. § 26-2-112, meaning Tennessee debtors must use Tennessee’s own exemption schedule rather than the federal exemptions listed in 11 U.S.C. § 522(d). You cannot choose whichever set is more favorable; Tennessee law makes the choice for you.

Tennessee’s exemptions were meaningfully updated on January 1, 2022, when the homestead exemption increased to its current level. The state also provides a broad $10,000 wildcard exemption that can shield a vehicle, savings, or other personal property of your choosing — an important tool since Tennessee has no separate motor vehicle exemption.

Chapter 7 vs. Chapter 13

Chapter 7 — Liquidation: Chapter 7 is the faster option, typically completing in 4–6 months. A court-appointed trustee reviews your assets and can liquidate anything not protected by Tennessee’s exemptions to pay creditors. In exchange, most remaining unsecured debts — credit cards, medical bills, personal loans — are discharged. To qualify, you must pass the means test under 11 U.S.C. § 707(b)(2), which compares your income to the Tennessee median for your household size. Most Tennessee filers pass automatically. See the full guide: Chapter 7 Bankruptcy in Tennessee.

Chapter 13 — Reorganization: Chapter 13 lets you keep all your assets by committing to a 3- to 5-year repayment plan funded by your disposable income. It is the primary tool for homeowners facing foreclosure, because it allows you to cure mortgage arrears over the life of the plan while continuing regular payments. It also offers a broader discharge than Chapter 7 for certain debts. See the full guide: Chapter 13 Bankruptcy in Tennessee.

Tennessee’s Key Exemptions

Tennessee law protects a significant amount of property from creditors and bankruptcy trustees:

Homestead: Up to $35,000 for a single owner; up to $52,500 for joint owners who both occupy the property as their principal residence (T.C.A. § 26-2-301, as amended effective January 1, 2022).
Wildcard: Up to $10,000 of any personal property the debtor selects — including money, bank deposits, and vehicle equity (T.C.A. § 26-2-103). This is Tennessee’s substitute for a vehicle exemption.
Retirement accounts: Essentially unlimited protection for 401(k), 403(b), IRA, Roth IRA, SEP, and pension accounts (T.C.A. § 26-2-105).
Absolutely exempt (no cap): Necessary wearing apparel, family portraits, and the family Bible (T.C.A. § 26-2-104).
Life insurance / annuity proceeds: Exempt when payable to a spouse, child, or dependent (T.C.A. § 26-2-110).
Tools of trade: Up to $1,900 (T.C.A. § 26-2-111(4)).
Personal injury awards: Up to $7,500 for bodily injury (T.C.A. § 26-2-111).

For the full exemption breakdown, see Tennessee Bankruptcy Exemptions.

The Three Federal Bankruptcy Districts in Tennessee

Tennessee has three federal bankruptcy court districts, and you must file in the district where you have lived or maintained a principal place of business for the greater part of the 180 days before filing:

Eastern District — serves Knoxville, Chattanooga, Greeneville, and Winchester.
Middle District — serves Nashville and surrounding counties.
Western District — serves Memphis and Jackson.

Each district has its own local rules, trustee panel, and procedural forms. An attorney licensed in Tennessee will know which district covers your county and the local practices of that court.

Before You File: Required Steps

Federal law requires you to complete a credit counseling course from an approved provider within 180 days before filing (11 U.S.C. § 109(h)). After filing, you must complete a debtor education course before receiving a discharge. Skipping either step can result in dismissal of your case.

Explore the Guides

Need help finding a bankruptcy attorney in Tennessee? Get help from a local lawyer who knows your district, your exemptions, and your options.

Guides

The Automatic Stay in Tennessee Bankruptcy
Filing a bankruptcy petition in any Tennessee federal district court immediately triggers the automatic stay under 11 U.S.C. § 362. The stay is a federal injunction that stops virtually all collection activity — phone calls, lawsuits, garnishments, foreclosures — for the duration of the case.
Chapter 13 Bankruptcy in Tennessee
Chapter 13 bankruptcy lets Tennessee debtors keep all their assets by committing to a court-approved repayment plan lasting 3 years (below-median income) or 5 years (above-median income). It is the main tool for stopping a foreclosure and catching up on mortgage arrears.
Chapter 7 Bankruptcy in Tennessee
Chapter 7 bankruptcy eliminates most unsecured debts through a court-supervised liquidation process. Tennessee filers must pass a means test, use Tennessee's state exemptions to protect property, and typically receive a discharge within 4–6 months of filing.
How Bankruptcy Works in Tennessee
Bankruptcy in Tennessee is a federal court process governed by Title 11 of the U.S. Code, but the exemptions that protect your property come from Tennessee state law. Most individuals file Chapter 7 (4–6 months) or Chapter 13 (3–5 year repayment plan).
Debts That Cannot Be Discharged in Tennessee Bankruptcy
Not every debt is wiped out in bankruptcy. Under 11 U.S.C. § 523, certain debts survive a Chapter 7 or Chapter 13 discharge: domestic support obligations, most student loans, recent income taxes, debts incurred by fraud, and debts for DUI injuries, among others.
Tennessee Bankruptcy Exemptions
Tennessee opted out of the federal bankruptcy exemption scheme, so debtors use Tennessee's own exemptions (T.C.A. Title 26, Chapter 2). Key protections: homestead up to $35,000 ($52,500 jointly), a $10,000 wildcard for any personal property, and essentially unlimited retirement account protection.

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