Tennessee: Credit, Debt & Bankruptcy

Federal law sets a floor everywhere. The FDCPA limits what collectors can do, and the FCRA governs credit reports. But the rules that decide a Tennessee case come from the Tennessee Code and from three separate federal bankruptcy courts.

Tennessee does allow wage garnishment for ordinary consumer debt. What surprises people is how much of the state's protection has to be claimed, not granted — including a per-child exemption that only counts if the employer is told about it.

Your official Tennessee resources

These are the state-level starting points most Tennesseans dealing with debt problems need:

• Tennessee Attorney General — Division of Consumer Affairs — the state clearinghouse for complaints about unfair or deceptive practices, under the Tennessee Consumer Protection Act of 1977 (T.C.A. §§47-18-101 et seq.). The Division moved into the Attorney General's Consumer Protection Division in 2019, so older pages may still say Department of Commerce and Insurance.
• Tennessee Administrative Office of the Courts — Self Help Center — the court system's own self-representation materials.
• Help4TN — a program of the Tennessee Alliance for Legal Services, with free legal information, booklets, forms, and referrals to legal aid.
• U.S. Bankruptcy Courts — Tennessee has three federal districts: Eastern (Chattanooga, Greeneville, Knoxville, Winchester), Middle (Nashville, with satellite offices in Cookeville and Columbia), and Western (Memphis and Jackson).

If you need	Official starting point
To respond to a debt lawsuit	The AOC Self Help Center or Help4TN
To report a collector or a credit repair company	Attorney General consumer complaint form
Free or low-cost legal help	Help4TN or the LSC legal aid locator
Bankruptcy forms and local rules	Your district's bankruptcy court site

Debt lawsuits in Tennessee

Smaller consumer debt cases in Tennessee usually start in General Sessions Court. Larger ones go to Circuit or Chancery Court. Either way, the papers served on the person being sued set the response date, and that date is what counts.

This guide does not print a statewide number of days, because the summons controls and the courts differ. Missing the date lets the collector ask for a default judgment, which opens the door to garnishment and bank account levies.

Showing up and responding forces the collector to prove two things: that the debt is really the defendant's, and that it is still inside the six-year window. Debt buyers who bought the account years after charge-off often struggle with the first.

Start with what to do when you are sued for a debt, then work through the debt lawsuit response checklist. Confirm the specific deadline with the court clerk or Help4TN.

Statute of limitations basics

Tennessee's general contract deadline is six years. T.C.A. §28-3-109(a)(3) says actions on contracts not otherwise expressly provided for must be commenced within six years after the cause of action accrued. Most credit card and personal loan claims land in that category.

The start date is where the arguments happen. It usually traces back to the last payment or the point the account went into default, and the paperwork behind an old charged-off account is often thin.

Read how the statute of limitations on debt works before making any decision about an old Tennessee account.

Wage garnishment and protected income

Tennessee tracks the federal floor for ordinary garnishment. Under T.C.A. §26-2-106, a creditor may take the lesser of two amounts from a workweek's take-home pay. The first is 25 percent of that pay. The second is the amount above 30 times the federal minimum hourly wage.

Then Tennessee adds something the federal rule does not have. T.C.A. §26-2-107 exempts an extra $2.50 a week for each dependent child under 16 who lives in Tennessee. It is not automatic. The statute puts the burden on the debtor to tell the employer about each child claimed. And it says the section does not apply if the debtor fails to do so.

Tennessee also lets a debtor ask the court that entered the judgment for an installment-payment order. That order can stay a garnishment, under T.C.A. §26-2-216. The request can come before or after a garnishment is served, after notice and a hearing.

Money is also protected once garnishment stops. T.C.A. §26-2-103 exempts personal property up to $10,000 of the debtor's equity interest. It expressly includes money and funds on deposit at a bank or other financial institution. Social Security and some other federal benefits carry their own shield from commercial garnishment in every state. Our wage garnishment guide covers the federal baseline and how exemption claims work.

Bankruptcy in Tennessee

Bankruptcy is federal, but it runs through local courts, and which of the three Tennessee districts handles a case depends on where the filer lives. Each district site posts local rules, local forms, filing locations, and self-representation information: Eastern, Middle, and Western.

State law decides which property a filer can protect. Tennessee opted out of the federal exemption list: T.C.A. §26-2-112 says Tennessee citizens are not authorized to claim the exemptions in 11 U.S.C. §522(d), so the state list applies instead.

The main state figures are the $10,000 aggregate personal property exemption in T.C.A. §26-2-103 and the homestead exemption in T.C.A. §26-2-301, which is $35,000 for an individual and a combined $52,500 for people who jointly own and use the property as their principal residence. Other exemptions sit in T.C.A. §26-2-111.

Dollar figures move over time, so it is worth confirming current amounts with the court, legal aid, or a bankruptcy attorney rather than any static article. For the big picture, start with our bankruptcy hub, the Chapter 7 guide, and filing without a lawyer. If bankruptcy is not the right fit, the debt relief options page compares the alternatives honestly.

Free and low-cost legal help

Many Tennesseans qualify for free help and never use it. Help4TN, run by the Tennessee Alliance for Legal Services, routes people to legal aid and posts plain-language guides and forms. The AOC Self Help Center covers court procedure.

The Tennessee Bar Association's public page is worth knowing for what it says plainly: the TBA is a voluntary membership organization that does not refer people to particular lawyers. It instead points to the lawyer-referral services run by bar associations in East, Middle, and West Tennessee, and to TN Free Legal Answers.

Court clerks can explain where and how to file, though they cannot give legal advice. Nationally, the LSC legal aid finder covers every state.

Common mistakes to avoid

• ✕Never telling the employer about dependent children. Tennessee adds $2.50 per week per dependent child under 16 to the protected amount, but T.C.A. §26-2-107 says the exemption does not apply if the debtor fails to inform the employer.
• ✕Assuming a garnishment cannot be slowed down. T.C.A. §26-2-216 lets a judgment debtor ask the court that entered the judgment for an installment-payment order, before or after a garnishment is served.
• ✕Letting the response date pass because settlement talks are underway. Negotiating does not pause the court clock, and a default judgment can still be entered.
• ✕Treating six years as an automatic shield. An expired limitations period is generally a defense that has to be raised in the case, not something the court applies on its own.
• ✕Paying a credit repair company up front. Tennessee bars charging for these services before the work is finished, and the federal CROA bans advance fees everywhere.
• ✕Paying for help before checking Help4TN and the AOC Self Help Center, which are free.

Credit repair companies in Tennessee: registration, bond, and how to check

Tennessee handles credit repair under the Credit Services Businesses part of its consumer protection chapter, T.C.A. §47-18-1001 et seq. Two rules do most of the work.

First, money up front is banned. T.C.A. §47-18-1003(1) makes it a prohibited practice to take any money before the agreed work is fully done. The statute carves out a limited installment plan. The same section, at subdivision (6), bars anyone from selling these services in Tennessee without a bond that meets T.C.A. §47-18-1011.

Second, that bond is real money. T.C.A. §47-18-1011 requires a bond for each location doing business in the state. The commissioner of commerce and insurance sets the amount. If no rule sets the level, the statute sets it at $100,000. The bond has to stay in place for two years after the business leaves Tennessee. The Attorney General can ask that the whole bond go to the state for consumer restitution or penalties, and consumers awarded damages can claim against it.

Contract rules: T.C.A. §47-18-1006 requires a written, dated, signed contract. Next to the signature line it needs a note in at least 10-point bold type. That note must say the buyer may cancel any time before midnight of the fifth business day after the deal. That is longer than the federal three-business-day right. Before any contract or payment, T.C.A. §47-18-1004 also requires a written information statement, and §47-18-1005 sets what it must contain.

If the rules are broken: a contract that does not comply is void and unenforceable under T.C.A. §47-18-1007. Waivers of these protections are void too. T.C.A. §47-18-1008 gives a private action for actual damages or the amount paid to the company, whichever is greater, plus punitive damages the court may allow.

How to check and complain: ask for the bond and the company's Tennessee filing before signing. Then look the company up in the CFPB complaint database. Complaints go to the Attorney General's consumer complaint form and the CFPB.

The federal floor everywhere: the Credit Repair Organizations Act (15 U.S.C. §1679) bans advance fees, requires a written contract, and gives a three-business-day right to cancel. Accurate, timely information cannot be removed by anyone. How to vet an offer is on credit repair services.

Finding a bankruptcy attorney in Tennessee

A Tennessee bankruptcy case is filed in the district that covers the filer's county: Eastern, Middle, or Western. Each district site posts local rules, local forms, and any pro se help or volunteer-lawyer program, and the Eastern District links the Knoxville and Chattanooga bar associations directly.

For referrals, the Tennessee Bar Association's public page collects the lawyer-referral services and searchable directories run by bar associations across East, Middle, and West Tennessee, since the TBA itself does not refer individuals to particular lawyers.

If income is limited, the LSC legal aid locator finds the federally funded program for any Tennessee address, Help4TN connects people with legal aid, and the NACBA member directory lists consumer bankruptcy attorneys by ZIP code. The ordered path, what a consultation costs, and the questions to ask before paying are on how to find a bankruptcy attorney near you.

Frequently asked questions

Can my wages be garnished in Tennessee for credit card debt?

Yes. Tennessee allows garnishment for ordinary consumer debts once a creditor has a judgment. Under T.C.A. §26-2-106 the maximum taken from a workweek's disposable earnings is the lesser of 25 percent of those earnings or the amount by which they exceed 30 times the federal minimum hourly wage, which matches the federal floor.

What is Tennessee's statute of limitations on credit card debt?

Six years for most contract claims. T.C.A. §28-3-109(a)(3) requires actions on contracts not otherwise expressly provided for to be commenced within six years after the cause of action accrued, and most credit card and loan claims fall in that category. The accrual date usually traces back to the last payment or the default.

Does Tennessee give me extra protection if I have children?

Yes, but only if you claim it. T.C.A. §26-2-107 exempts an additional $2.50 per week for each dependent child under 16 who lives in Tennessee. The statute puts the burden on the judgment debtor to inform the employer of each child claimed, and says the section does not apply if the debtor fails to do so.

Can I stop or slow a Tennessee garnishment once it starts?

Tennessee has a specific route for asking. Under T.C.A. §26-2-216, the judge of the court that entered the judgment may, before or after a garnishment is served, order the judgment debtor to pay the clerk a set amount weekly, biweekly, or monthly toward the judgment, on written consent of the parties or on the debtor's written motion after notice and a full hearing.

How much money in a bank account is protected in Tennessee?

T.C.A. §26-2-103 exempts personal property up to an aggregate $10,000 of the debtor's equity interest, and the statute expressly lets the debtor select money and funds on deposit at a bank or other financial institution within that total. Social Security and certain other federal benefits carry separate protection from commercial garnishment.

Can Tennessee filers use the federal bankruptcy exemptions?

No. T.C.A. §26-2-112 declares Tennessee's own exemptions adequate and says Tennessee citizens are not authorized to claim the exemptions in 11 U.S.C. §522(d). The state list applies, including the $10,000 personal property exemption and the homestead exemption in T.C.A. §26-2-301.

What is Tennessee's homestead exemption?

T.C.A. §26-2-301 gives an individual, head of family or not, a homestead exemption of up to $35,000 on real property used as a principal residence. People who jointly own and use the property as their principal residence get combined exemptions capped at $52,500. Amounts change over time, so confirming the current figure matters.

How long do I have to respond to a debt lawsuit in Tennessee?

This guide does not state a single statewide number of days, because Tennessee cases run through General Sessions, Circuit, and Chancery courts and the deadline is printed on the summons and complaint actually served. Missing that date lets the collector ask for a default judgment, so confirming it with the court clerk or Help4TN matters.

Do credit repair companies have to be registered in Tennessee?

They have to be bonded. T.C.A. §47-18-1003(6) bars providing credit services business services in Tennessee without a bond consistent with T.C.A. §47-18-1011, which requires a bond for each location in an amount set by the commissioner of commerce and insurance, defaulting to $100,000 if no rule sets the level. A bond is not an endorsement, and the federal CROA rules still apply.

When to talk to a professional