Tennessee Bankruptcy Guide

Complete guide to filing bankruptcy in Tennessee, including current median income requirements, Tennessee's homestead exemption up to $12,500 ($25,000 for married couples), choice between state and federal exemptions, bankruptcy court information for all three Tennessee districts, and how to find qualified bankruptcy attorneys throughout Tennessee.

Tennessee Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in Tennessee, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$53,948	$4,496
2 people	$67,515	$5,626
3 people	$71,907	$5,992
4 people	$84,224	$7,019
5 people	$93,224	$7,769
6 people	$102,224	$8,519

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program.

Calculate Your Tennessee Eligibility

Tennessee Bankruptcy Exemptions

Tennessee allows bankruptcy filers to choose between Tennessee state exemptions and the federal bankruptcy exemptions. This choice is particularly important in Tennessee because the state homestead exemption is relatively modest, making federal exemptions often the better choice for homeowners with low equity.

Tennessee Homestead Exemption

Up to $12,500 ($25,000 for married couples filing jointly).

Tennessee's state homestead exemption protects up to $12,500 of equity in your primary residence for a single filer, or $25,000 for a married couple filing jointly. This is one of the lower homestead exemptions in the country.

The exemption applies to real property including houses, condominiums, mobile homes, and co-ops that serve as your principal residence. The property must be your principal residence at the time of filing bankruptcy.

Federal Exemption Alternative: Tennessee filers can instead choose the federal homestead exemption of $27,900 ($55,800 for married couples filing jointly), which is significantly higher than Tennessee's state exemption. For most Tennessee homeowners, the federal exemptions provide better homestead protection.

Tennessee Vehicle Exemption

Up to $4,000.

Tennessee allows you to protect up to $4,000 of equity in one motor vehicle under state exemptions. This exemption is available to each filer, so a married couple filing jointly can protect two vehicles.

Federal Exemption Alternative: The federal vehicle exemption is $4,450, which is slightly higher than Tennessee's $4,000 state exemption. The federal exemptions also offer a wildcard that can be applied to vehicles.

Tennessee State Exemptions

Tennessee bankruptcy exemptions include:

• Homestead: $12,500 ($25,000 for married couples filing jointly)
• Vehicle: $4,000
• Personal Property: $10,000 of any personal property
• Burial Plot: $5,000
• Tools of Trade: Included in personal property exemption
• Wildcard: The $10,000 personal property exemption functions as a wildcard
• Wages: Certain percentages of earned wages
• Tenancy by the Entirety: Unlimited protection for certain jointly-owned property

Federal Exemptions (Alternative Choice)

Tennessee filers may choose federal exemptions instead:

• Homestead: $27,900 ($55,800 for married couples)
• Vehicle: $4,450
• Household Goods: $700 per item, up to $14,875 total
• Jewelry: $1,875
• Tools of Trade: $2,800
• Wildcard: $1,475 general + up to $13,950 of unused homestead (total $15,425)

Tennessee Tenancy by the Entirety

Tennessee recognizes tenancy by the entirety, a special form of property ownership available only to married couples. When property is held as tenancy by the entirety and only one spouse has debts, that property may be fully protected from the filing spouse's creditors in bankruptcy, regardless of the exemption amounts.

This powerful protection can apply to homes, other real estate, and certain personal property. Requirements: (1) you must be legally married, (2) only one spouse is filing bankruptcy, and (3) the debts are the filing spouse's individual debts, not joint debts.

Which Exemptions Should You Choose?

Choose Tennessee state exemptions if:

• You're married, only one spouse is filing, and can use tenancy by the entirety protection
• You have minimal home equity and want the $10,000 personal property wildcard
• You have valuable burial plots (Tennessee allows $5,000)

Choose federal exemptions if:

• You have more than $12,500 home equity (single) or $25,000 (married) - federal allows $27,900/$55,800
• You're a homeowner with moderate equity (federal homestead is more than double Tennessee's)
• You want the larger total wildcard ($15,425 federal vs $10,000 Tennessee personal property)
• You have significant household goods (federal allows $14,875)

Other Protected Assets

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits under federal law
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits, public assistance
• Life Insurance: Life insurance proceeds if beneficiary is not the estate; unmatured policies if annual premium is less than $2,000
• Health Aids: All health aids
• Education Savings: Tennessee 529 education savings plan
• Personal Injury Awards: Personal injury recoveries up to $10,000 (included in personal property exemption)

Filing Bankruptcy in Tennessee

Chapter 7 Bankruptcy in Tennessee

Chapter 7 bankruptcy is commonly filed throughout Tennessee. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in Tennessee, you must pass the means test by having income below the Tennessee median or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Tennessee's choice between state and federal exemptions gives you flexibility. Most Tennessee homeowners benefit from choosing federal exemptions due to the higher homestead exemption. Work with a Tennessee bankruptcy attorney to determine which exemption set protects your specific assets better.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in Tennessee

Chapter 13 bankruptcy allows Tennessee residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is especially useful in Tennessee if your income is too high to qualify for Chapter 7, if you have non-exempt assets you want to protect (particularly if you have more home equity than either exemption system allows), or if you have priority debts like recent taxes or past-due child support. Your monthly payment is based on your disposable income after allowable living expenses.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Courts in Tennessee

Tennessee is divided into three federal bankruptcy court districts:

Eastern District of Tennessee

Main Courthouses: Knoxville, Chattanooga, Greeneville

Covers eastern Tennessee including Knoxville, Chattanooga, the Tri-Cities area (Johnson City, Kingsport, Bristol), Oak Ridge, and the eastern portion of the state. This district serves the Appalachian and eastern Tennessee regions.

Court divisions: Northern Division (Knoxville area), Southern Division (Chattanooga area), and Northeastern Division (Greeneville, Tri-Cities area).

Middle District of Tennessee

Main Courthouses: Nashville, Columbia, Cookeville

Covers middle Tennessee including Nashville, Murfreesboro, Franklin, Clarksville, Cookeville, and the central portion of the state. This district serves the most populated region of Tennessee, including the Nashville metropolitan area.

Court divisions: Nashville Division (Davidson County and surrounding areas), Columbia Division (southern middle Tennessee), and Cookeville Division (upper Cumberland region).

Western District of Tennessee

Main Courthouses: Memphis, Jackson

Covers western Tennessee including Memphis, Jackson, and the western portion of the state. Memphis is the largest city in this district and handles a high volume of bankruptcy cases.

Court divisions: Western Division (Memphis and Shelby County area) and Eastern Division (Jackson and surrounding counties).

You must file in the district where you have lived for the greater part of the 180 days before filing. Visit the U.S. Courts website for specific court locations, filing procedures, and local rules for each Tennessee district.

Tennessee Residency Requirements

To use Tennessee bankruptcy exemptions (either state or federal), you must have been domiciled (legally residing) in Tennessee for at least 730 days (2 years) before filing. If you've lived in Tennessee for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

Tennessee allows you to choose between state and federal exemptions once you meet the residency requirement. This choice is made at the time of filing and cannot be changed later, so careful analysis with an attorney is important.

Find a Tennessee Bankruptcy Attorney

Most Tennessee bankruptcy attorneys offer free initial consultations. Given the complexity of bankruptcy law and Tennessee's choice between state and federal exemptions (plus the potential for tenancy by the entirety protection), consulting with an experienced Tennessee bankruptcy attorney is highly recommended.

What a Tennessee Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Compare Tennessee state vs. federal exemptions to maximize asset protection
• Evaluate whether you qualify for tenancy by the entirety protection if married
• Calculate whether you qualify for Chapter 7 using the Tennessee means test
• Navigate Tennessee-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in Tennessee

Chapter 7 bankruptcy attorney fees in Tennessee vary by location:

• Nashville metro area: $1,100 to $1,700 plus $338 filing fee
• Memphis area: $1,000 to $1,600 plus $338 filing fee
• Knoxville area: $1,000 to $1,500 plus $338 filing fee
• Chattanooga area: $950 to $1,450 plus $338 filing fee
• Other Tennessee cities and rural areas: $800 to $1,300 plus $338 filing fee

Chapter 13 attorney fees typically range from $2,800 to $4,000 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront.

Many Tennessee attorneys offer payment plans for Chapter 7 to make bankruptcy more accessible.

Tennessee-Specific Bankruptcy FAQs

Can I keep my house in Tennessee bankruptcy?

It depends on your equity. If you're single with up to $27,900 equity (using federal exemptions) or married with up to $55,800 equity (federal), your home is protected. Tennessee state exemptions only protect $12,500/$25,000, which is why most Tennessee homeowners choose federal exemptions. If you're married and only one spouse files, tenancy by the entirety may provide unlimited protection for jointly-owned property.

Can I keep my car in Tennessee bankruptcy?

Yes, in most cases. Tennessee allows you to exempt up to $4,000 of equity under state exemptions, or $4,450 under federal exemptions. Federal exemptions also provide a wildcard that can be applied to vehicle equity. If you owe more than your car is worth or have equity within these limits, you can typically keep it by continuing to make payments through a reaffirmation agreement.

Should I choose state or federal exemptions in Tennessee?

Most Tennessee homeowners should choose federal exemptions because the federal homestead ($27,900 single, $55,800 married) is more than double Tennessee's state homestead ($12,500/$25,000). Federal exemptions also offer a larger wildcard. However, if you're married and only one spouse is filing, Tennessee state exemptions combined with tenancy by the entirety protection may be better. An attorney can analyze your specific situation.

What is tenancy by the entirety in Tennessee?

Tenancy by the entirety is a special form of property ownership for married couples in Tennessee. When only one spouse files bankruptcy and the property is held as tenancy by the entirety, the property may be completely protected from that spouse's individual creditors regardless of exemption amounts. This applies to homes, other real estate, and certain personal property. Requirements: you must be married, only one spouse files, and the debts must be individual (not joint) debts.

How does Tennessee's no income tax affect bankruptcy?

Tennessee has no state income tax on wages (though it does tax investment income). This means Tennessee residents may have slightly higher take-home pay compared to other states, which can affect means test calculations and Chapter 13 payment amounts. However, Tennessee has sales tax and property tax that offset this. Your bankruptcy attorney will properly calculate your income and expenses for Tennessee.

Can I protect my firearms in Tennessee bankruptcy?

Firearms are personal property that can be protected using Tennessee's $10,000 personal property exemption (if choosing state exemptions) or federal wildcard exemptions. The value of your firearms counts against these exemption limits. If you have valuable firearm collections, discuss protection strategies with your Tennessee bankruptcy attorney.

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