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 If you have seen older figures such as $5,000, $7,500, or $25,000 for a filer with a minor child, those are no longer current.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. With one $10,000 wildcard covering vehicle equity, cash, and household goods together, let a Tennessee lawyer work out how to allocate it in a free bankruptcy evaluation before you file (attorney advertising).

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, there is no presumption of abuse and you do not need to complete Form 122A-2, but that alone does not make you eligible 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 means-test calculation raises a presumption of abuse in Chapter 7.

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.

Frequently Asked Questions

Does Tennessee use state or federal bankruptcy exemptions?

Tennessee has opted out of the federal exemptions under T.C.A. 26-2-112, so filers must use the Tennessee state exemptions in Title 26 and cannot choose the federal set. Certain federal nonbankruptcy protections, such as some retirement accounts, can still apply.

What is the homestead exemption in Tennessee?

The homestead exemption is $35,000 for an individual and $52,500 for owners who jointly own and use the home as their principal residence (T.C.A. 26-2-301), effective January 1, 2022. The 2022 change replaced the older $5,000 / $7,500 amounts and removed the prior enhancements for minor children and filers age 62 and older.

What is the Tennessee median income for the means test?

For cases filed on or after April 1, 2026, the U.S. Trustee Program median family income for Tennessee is $63,979 for 1 earner, $82,846 for 2, $97,511 for 3, and $109,585 for 4, plus $11,100 for each additional person. These figures update about twice a year.

Will I lose my house or car if I file bankruptcy in Tennessee?

Often no. The homestead exemption ($35,000 individual, $52,500 joint) protects home equity up to those limits, and you must stay current on the mortgage to keep the home. Tennessee has no separate vehicle exemption, so vehicle equity is protected with the $10,000 personal-property wildcard under T.C.A. 26-2-103; equity above your available exemptions can be at risk in Chapter 7.

Does Tennessee have a motor-vehicle exemption?

Tennessee has no stand-alone motor-vehicle exemption. Filers protect vehicle equity using the $10,000 personal-property wildcard in T.C.A. 26-2-103, which can be applied to a car, cash, household goods, or other personal property the filer chooses.

Where do I file for bankruptcy in Tennessee?

Tennessee has three federal districts. Depending on your county, you file in the U.S. Bankruptcy Court for the Eastern, Middle, or Western District of Tennessee.

What debts cannot be discharged in a Tennessee bankruptcy?

Most student loans, recent income taxes, child support, alimony, and debts from fraud generally cannot be discharged. Most credit-card debt, medical bills, and personal loans usually can be. A credit-counseling course is required before filing.