Bankruptcy in Tennessee (2026): Exemptions & Means Test

Bankruptcy is federal law, but Tennessee sets the exemptions that decide which property you keep when you file. Tennessee has opted out of the federal bankruptcy exemptions, so residents must use the state's own exemptions, found mainly in Title 26 of the Tennessee Code. Tennessee's homestead exemption was significantly increased effective January 1, 2022, replacing a lower tiered system. This guide explains the homestead, the personal-property wildcard, the Chapter 7 means test for Tennessee, and where cases are filed. The figures below are dated; confirm current amounts before relying on them.

Does Tennessee Use State or Federal Bankruptcy Exemptions?

Tennessee has opted out of the federal bankruptcy exemptions. Under T.C.A. 26-2-112, the Tennessee legislature declared the state's own exemptions adequate and provided that residents may not claim the federal exemptions in 11 U.S.C. 522(d). A Tennessee filer therefore protects property using state exemptions in Title 26 (and a few other titles), not the federal menu. Some federal nonbankruptcy protections, such as certain retirement accounts and benefits, can still apply.

Residency rules under 11 U.S.C. 522(b)(3) determine which state's exemptions you use. If you have not lived in Tennessee long enough before filing (generally the prior 730 days, with a look-back for the earlier period), a previous state's exemptions may apply instead.

Tennessee Homestead Exemption

Tennessee's homestead exemption protects equity in your principal residence. Under T.C.A. 26-2-301, the basic exemption is $35,000 for an individual. Owners who jointly own and use the property as their principal residence are entitled to a combined homestead exemption of $52,500, divided equally among them if claimed in the same proceeding.

These amounts took effect January 1, 2022. The earlier law provided a much lower basic exemption of $5,000 ($7,500 for joint owners) and included separate, higher tiers for filers with minor children and for filers age 62 and older. The 2022 amendment deleted those special tiers and set the single flat structure of $35,000 and $52,500. If you have seen older figures such as $5,000, $7,500, or $25,000 for a filer with a minor child, those are no longer current.

A federal cap can also apply. Under 11 U.S.C. 522(p), a debtor generally cannot exempt more than $214,000 (the amount in effect for cases filed on or after April 1, 2025, adjusted again April 1, 2028) of homestead equity acquired during the 1,215 days before filing. This rarely limits Tennessee filers because the state homestead is already below that cap.

Motor Vehicle, Personal Property, and Wildcard Exemptions

Tennessee does not provide a separate motor-vehicle exemption. Instead, the state offers a broad personal-property wildcard under T.C.A. 26-2-103 of up to $10,000 in any personal property, including funds on deposit in a bank account. A filer typically applies this wildcard to vehicle equity, cash, household goods, or other personal property of the filer's choosing. It does not apply to real estate.

Tennessee separately exempts specific items, such as necessary clothing and certain tools of the trade, and protects various benefits. Wages are also partly protected: Tennessee limits garnishment to 25 percent of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum hourly wage, whichever is less, with an additional weekly amount exempt for each dependent child under age 16 residing in the state. Confirm the current figures, since exemption amounts and garnishment rules can change.

The Tennessee Means Test

The Chapter 7 means test compares your household income to the median family income for your household size in Tennessee. If your income is at or below the median, you presumptively qualify for Chapter 7. If it is above the median, a fuller disposable-income calculation on Bankruptcy Form 122A-2 decides whether the filing is presumed abusive.

The U.S. Trustee Program publishes and periodically updates the medians. For cases filed on or after April 1, 2026, the Tennessee median family income is:

• 1 earner: $63,979
• 2 people: $82,846
• 3 people: $97,511
• 4 people: $109,585

Add $11,100 for each individual beyond four. These numbers are revised about twice a year, so check the current U.S. Trustee table for your filing date.

Chapter 7 vs. Chapter 13 and the Automatic Stay

Chapter 7 is a liquidation. A trustee can sell nonexempt property to pay creditors, and most remaining unsecured debt is discharged, usually within a few months. Because Tennessee's homestead and $10,000 wildcard cover a typical filer's essential property, many Chapter 7 cases are no-asset cases.

Chapter 13 is a reorganization. You keep your property and repay part or all of what you owe through a court-approved plan lasting three to five years. It fits filers who are behind on a mortgage or car loan and want to catch up, or whose income is too high to pass the Chapter 7 means test.

Filing either chapter triggers the automatic stay under 11 U.S.C. 362, which immediately stops most collection efforts, foreclosure, repossession, lawsuits, and wage garnishment while the case proceeds.

Where You File in Tennessee

Unlike South Carolina and South Dakota, which each have a single statewide district, Tennessee is split into three federal districts. Cases are filed in the U.S. Bankruptcy Court for the Eastern District of Tennessee, the Middle District of Tennessee, or the Western District of Tennessee, depending on the county where you live. Each court publishes its own local rules, forms, and filing information.

What Bankruptcy Can and Cannot Do

Bankruptcy discharges most unsecured debts, including credit cards, medical bills, and personal loans. It generally does not discharge most student loans, recent income taxes, child support, alimony, or debts from fraud. Before filing, you must complete a credit-counseling course from an approved provider, and before discharge you must complete a debtor-education course.

Exemption amounts, median income figures, and federal caps all change on their own schedules. This page is general information, not legal advice. Because the right chapter and the property you can protect depend on your specific finances, consider consulting a licensed Tennessee bankruptcy attorney and confirming every figure against the current statute and U.S. Trustee data.