Bankruptcy in Tennessee
Filing for bankruptcy can stop creditor harassment, prevent foreclosure, and give you the space to reorganize or discharge certain debts. Whether you’re looking to eliminate debt through Chapter 7 or create a structured repayment plan with Chapter 13, the process is designed to help you reclaim control.
From specific exemption laws to court procedures, bankruptcy in Tennessee requires careful attention. What you keep, what you repay, and how your case is handled depend on the details of your situation.
Get the support you deserve. We connect Tennessee residents with experienced bankruptcy attorneys who know how to protect what matters.
Types of Bankruptcy in Tennessee
Bankruptcy offers a legal path for individuals and businesses to shed unmanageable debt and regain financial control. It’s designed to clear away qualifying liabilities—sometimes partially, sometimes entirely—so you can move forward without constant pressure from creditors. In TN, you’ll need to show that you’re experiencing financial hardship and can no longer keep up with your obligations to be eligible for relief.
That said, not every type of debt can be erased. Child support, recent tax debt, alimony, and most student loans are typically excluded. If you’re exploring bankruptcy, your next step is to decide whether Chapter 7, Chapter 11, or Chapter 13 fits your needs.
In Tennessee, bankruptcy cases are adjudicated by the U.S. Bankruptcy Courts across three federal judicial districts: Eastern, Middle, and Western. Each district serves specific regions and operates multiple court locations to accommodate residents throughout the state.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy gives many individuals a way to reset their financial lives. If you’re overwhelmed by debt and unable to pay it off, this option may provide the relief you need. It works by discharging qualifying debts, giving you the chance to move forward.
Before moving forward, you’ll want to take a close look at your financial situation. That includes your income, assets, and what you hope to achieve long-term. Chapter 7 isn’t right for everyone, and not everyone qualifies.
This type of bankruptcy is often best suited for people with low or no income. However, it’s important to understand the trade-offs. Depending on your situation, you might lose certain assets if they fall outside your state’s exemptions.
In Tennessee, qualifying for Chapter 7 bankruptcy involves passing a means test, which assesses your financial situation to determine eligibility. The first step compares your average monthly income over the six months preceding your filing to the state’s median income for a household of your size. The median annual incomes in 2025 in Tennessee are:
- 1-person household: $60,176
- 2-person household: $76,008
- 3-person household: $90,131
- 4-person household: $106,705
- For households larger than four, add $9,900 for each additional member.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is one of the most complex forms of debt relief available. It’s typically reserved for businesses or high-income individuals facing significant financial obligations that can’t be easily resolved. Unlike Chapter 7 or Chapter 13, this process involves a detailed reorganization of debt rather than a liquidation or simplified payment plan. Timelines vary, but most repayment plans span several months to more than a year.
What makes Chapter 11 appealing is that you don’t have to give up control of your assets. Instead of selling off property, you’ll propose a structured repayment plan. This plan must be approved by the court and negotiated with your creditors. If accepted, it allows you to retain ownership of key assets, such as business equipment, real estate, or investment property.
However, this form of bankruptcy demands thorough preparation. The court will expect you to present detailed financial disclosures:
- Voluntary Petition for Individuals or Non-Individuals Filing for Bankruptcy (Form 101 or 201)
- Schedules of Assets and Liabilities (Form 106/206 series)
- Statement of Financial Affairs (Form 107 or 207)
- Summary of Assets and Liabilities (Form 106Sum or 206Sum)
- Creditor Matrix (list of all creditors and their contact information)
- Chapter 11 Statement of Current Monthly Income (Form 122B, if applicable)
- Chapter 11 Plan of Reorganization and Disclosure Statement
- List of Equity Security Holders (if filing on behalf of a corporation)
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is often called a wage earner’s plan because it’s designed for people who have regular income but need help managing debt. In TN, once you file your petition, a court-appointed trustee steps in to review your finances, including your debts, assets, and ability to repay.
What sets Chapter 13 apart is the repayment plan. Over the next three to five years, you’ll make monthly payments based on what you can afford, not necessarily what you owe in full. The structure of your plan will depend on your income and the property you want to hold onto. Some of your debts may even be reduced or eliminated by the end of the process.
The Bankruptcy Process in Tennessee
There’s rarely a perfect time to declare bankruptcy. But if your debt keeps climbing and there’s no realistic way to repay it within five years, it may be time to explore your legal options. Bankruptcy isn’t an easy decision, but it can give you space to breathe and a structured way to start over when nothing else seems to work.
In Tennessee , the first step is gathering your financial documents. You’ll need a full picture of your situation, including your income, expenses, debts, and assets. This information helps the court determine whether you qualify and what kind of bankruptcy fits your case. Leaving out key details—or submitting inaccurate numbers—can lead to delays or even a denied petition.
You’ll also be assigned a trustee who reviews your paperwork and manages your case. Depending on the chapter you file, you may need to propose a repayment plan or prepare to give up non-exempt property. Tennessee offers several exemptions that may help protect your assets, including equity in your home, vehicle, and certain personal belongings.
Tennessee law provides several exemptions that allow you to protect certain property from being used to pay creditors:
- Homestead Exemption: Protects equity in your primary residence up to $5,000 for a single filer, $7,500 for joint owners, $12,500 for a single filer aged 62 or older, $20,000 if one spouse is 62 or older, and $25,000 if both spouses are 62 or older or if the filer has a minor dependent child.
- Wildcard Exemption: Allows you to exempt up to $10,000 of any personal property of your choosing, including cash and funds in a bank account.
- Personal Property Exemptions: Includes necessary clothing, family portraits, a Bible, school books, and tools of the trade up to $1,900.
- Retirement and Pension Benefits: Most tax-exempt retirement accounts are fully protected, including 401(k)s, 403(b)s, and IRAs up to $1,711,975 per person for cases filed between April 1, 2025, and March 31, 2028.
- Public Benefits: Exemptions cover Social Security benefits, unemployment compensation, veterans’ benefits, and public assistance.
Work With an Experienced Tennessee Lawyer
Bankruptcy may not be the first solution that comes to mind. But for many Tennessee residents, it can be the most effective way to stop the financial bleeding and start again with a clean slate. Whether you’re dealing with mounting credit card debt, medical bills, or foreclosure threats, the right chapter can give you time, space, and legal protection.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations.
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