Bankruptcy in Tennessee
Are you contemplating bankruptcy or hiring a bankruptcy attorney in Tennessee ? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.
Types of Bankruptcy in Tennessee
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Tennessee , to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
Bankruptcy cases must be heard in specialized U.S. Bankruptcy Courts. Tennessee has 3 bankruptcy courts; one in Nashville, in Knoxville, and Chattanooga.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Tennessee who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
The Legal Aid Society of Tennessee provides an online guide for filing Chapter 7. Chapter 7 can help you discharge your debt. This means that once the bankruptcy process is over, creditors will not be able to collect from you. However, it is worth noting that certain obligations are not relieved by bankruptcy. Alimony, child support, and certain tax debts will still have to be paid in full despite filing Chapter 7.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
Filing for Chapter 11 in Tennessee is usually a path that businesses take to get out from underneath their debt when they don’t want their businesses to liquidate in order to achieve this goal. Under Chapter 11, the debt is restructured and generally, the filer is given a time period of 3 to 5 years to pay the debt. The State of Tennessee provides an online Operating Guide and Reporting Requirement for Chapter 11.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Tennessee after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.
Tennessee Bankruptcy Law states that there are several circumstances where it is better for the individual to file for Chapter 13 rather than Chapter 7. Chapter 13 is better for people who are looking to hang on to their property, or could be more desirable because you make too much income to file for Chapter 7. Chapter 13 may be the most beneficial because it places you firmly in control. It allows you the time you need to get out from under the debt without it becoming consuming. An experienced attorney in Tennessee can help you draw up the payment schedule.
The Bankruptcy Process in Tennessee
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In Tennessee to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets, and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
The U.S. Courts provide a precise timeline of how to follow the bankruptcy process. You’ll need to determine if bankruptcy can erase your debt, and then you’ll have to decide which type of bankruptcy will be most beneficial to you. After you’ve discovered if you qualify for bankruptcy you’ll find out what property you can exempt and stop paying any qualifying debts. You’ll also need to take a credit counseling class. An experienced Tennessee attorney can almost certainly help you with this process.
Tennessee has a homestead exemption of $5,000 for a single filer and $7,500 for a married couple. However, this exemption raises to $12,500 and $25,000 if the single filer or joint couple is over 62. You can also exempt up to $10,000 in personal property such as jewelry, clothing, and furniture. In addition, pensions and public benefits can be exempt, as well as insurance benefits.
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced Tennessee Lawyer
Hiring a local bankruptcy lawyer in Tennessee during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts can be discharged or can’t be discharged. An experienced Tennessee attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Tennessee can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Tennessee state lines.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!