Rights of Creditors in Insurance -- The Tennessee Exemption Statutes

The subject of the availability of assets to creditors is important when a trustee in bankruptcy as a representative of creditors is seeking to gather assets to pay off creditors; and the subject is of equal importance where a single creditor, not in a bankruptcy proceeding, is seeking to satisfy his claim out of the assets of his debtor. Whatever is property in the hands of the debtor is available to his creditors, unless it is exempt by law. This property is his estate, considered indifferently from the standpoint of the single creditor who seeks to realize for himself alone, or of the trustee in bankruptcy as a representative of creditors. The concept of exemption of an asset from creditors stems from bankruptcy under the Roman system.

In the medieval bankruptcies which took place at the great fairs under the law merchant, the debtor was allowed scanty bedding and clothing and the tools of his trade. The English statutory bankruptcy, which had its origin in 1571, made no reference to exemptions until 1705, when the law was amended to set apart an allowance for "a bankrupt surrendering and conforming" and giving full discovery of his estate. This practice was continued in English legislation, so that today the English Law gives a bankrupt who is truthful upon his examination exemptions of' necessary wearing apparel and bedding for himself, his wife and children, the tools of his trade and certain other allowances.