The Bankruptcy Process
The process of filing for Chapter 7 bankruptcy in Tennessee
Chapter 7 bankruptcy is the most popular form of bankruptcy in the U.S. and has certain eligibility and procedural requirements.
A significant number of Tennessee residents and Americans across the country have been forced to file for bankruptcy in hopes of gaining financial freedom from excessive debt and despair. More than one million people filed for bankruptcy in 2013, according to United States Courts. Chapter 7 was the most popular type of bankruptcy filed that year, with 728,833 cases. Chapter 13 came in second, with 333,626 cases filed. People struggling with financial uncertainty may want to investigate the different types of bankruptcies, as well as the bankruptcy process in Tennessee.
What is Chapter 7 bankruptcy?
People who file for Chapter 7 bankruptcy, otherwise referred to as liquidation bankruptcy, will have the majority of their debt fully absolved once the bankruptcy is discharged. This gives people who are overwhelmed with credit card, medical or mortgage debt, the chance to begin again with a clean financial start. Some types of debt, including money owed to the federal government or certain educational institutions, cannot be discharged, according to the Bankruptcy Code.
During a liquidation bankruptcy, the court has the ability to repossess and sell the debtor’s property. The trustee will then distribute the collected funds to the creditors. Some property is exempt from repossession, including 100% of retirement accounts, clothing and medical equipment including eyeglasses and hearing aids, a family bible, and cemetery plots. Other personal property is protected up to $10,000.00 per debtor. Tools of the trade are exempt up to $1900.00
Who is eligible for Chapter 7 bankruptcy?
To qualify for Chapter 7, the person filing must pass a bankruptcy means test, which determines how much disposable income he or she has available. The debtor’s income must be at or below the state median in order to be able to file. The debtor must also complete a credit counseling course within 180 days of filing for bankruptcy.
The Court will make an order for relief, which alerts creditors that the debtor has filed for bankruptcy and can no longer be contacted regarding delinquent payments.
Finding legal counsel
Declaring bankruptcy can be stressful, especially without a knowledgeable lawyer to guide you through the process. A Tennessee bankruptcy attorney can make sure that you have all of your necessary forms submitted according to the deadlines, and that your debt is discharged in a timely manner.
The bankruptcy process
In addition to completing the credit counseling course and paying all required fees, the debtor must provide the following information:
- A list of all assets and property
- A complete list of creditors and how much money is owed to each
- All sources of income and the frequency in which the debtor receives the income
- A detailed list of monthly living expenses, including clothing, shelter, food, transportation, medicine, utilities and any other financial obligations the debtor may have.
Questions? You're covered.
Bankruptcy protection aims to give you a fresh start financially, but it takes hard work to make that fresh start work for you. Some pitfalls to avoid after filing for bankruptcy include rebuilding credit with the wrong lenders, credit repair Ponzi schemes, and poor financial planning.
You can buy a home even after filing for bankruptcy. No matter the reasons for filling, you can be eligible to apply for a home loan again later.
There is no limit on how many times you can file bankruptcy in Middle Tennessee. Speak to our bankruptcy attorney about the possible restrictions if you are considering filing a claim.
