Filing Bankruptcy In Tennessee

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Filing bankruptcy in Tennessee is a solution for debtors that cannot afford to pay the bills.  Some debtors will never pay off massive medical bills or other debt. The financial pressures dictate the need for a fresh start economically.  For others, a payment restructure plan will allow them to keep their assets and regain financial footing, while repaying creditors.


Tennessee Bankruptcy Topics

  1. Personal Bankruptcy Options
  2. Keep Your Home: Bankruptcy and Foreclosure
  3. Tennessee Exemptions to Bankruptcy Liquidation
  4. Options for Filing Bankruptcy
  5. Tennessee Bankruptcy Courts and Trustees


Options for Personal Bankruptcy in Tennessee

All states follow the same basic bankruptcy laws. In accordance with U.S. Bankruptcy Code, Title 11, Tennessee residents can file Chapter 7 or Chapter 13 bankruptcy, in an effort to obtain debt relief. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is for the debtors looking for a fresh start. However, in order to qualify for straight bankruptcy, the debtor is required to take a means test, to prevent individuals from taking advantage of the court.  Then, the court trustee will sell any items of value that are not exempt from bankruptcy, and the proceeds are distributed evenly among the creditors.  All other debts no prohibited from bankruptcy are expunged, and the debtor is free to start over financially.  In Tennessee, the average income for a single person is $37,202; a family of two is $48,729; and a three person household is $55,190.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is the answer for people that want to keep the family home, car, small business, and other assets.  However, unforeseen circumstances like medical bills, a cutback in work hours, or some other change affecting finances makes paying debt impossible.  Nevertheless, when the court negotiates with creditors to reduce the amount owed, a restructuring plan helps the debtor meet financial obligations, while retaining property.  However, a debtor will not qualify for Chapter 13, if the unsecured debt amount is more than $336,900 or the secured debt is beyond $1,010,650.

Filing Bankruptcy during Foreclosure

Before foreclosure proceedings are initiated, a debtor should consult a bankruptcy lawyer regarding retention of the property.  Waiting until the lien holder serves notice to file bankruptcy only delays the inevitable.  In most cases, the creditor can ask the judge to lift the stay, so the foreclosure will go through, and the property resold.  However, filing Chapter 13 before foreclosure notice is served may allow the debtor to keep the property.

Tennessee Bankruptcy Exemptions

In every state, a list of potential bankruptcy exemptions allows the debtor to claim assets.  If requested, the items and benefits cannot be seized for repayment of debt.  The following chart includes some of the exemptions allow by the state of Tennessee:

Type of Asset(s)

Details on Applicable Exemption(s)

Homestead

$5000 or 7500 for joint owners; lease of 2-15 years; life estate; tenancy is exempt-if debts are held by only one spouse

Insurance

Accident, health, or disability insurance; fraternal and society benefits; disability or illness benefits;  homeowner proceeds of no more than $5000; life insurance or annuity exempt from claims on behalf of beneficiaries

Misc.

Alimony owed 30 days before filing and partnership assets

Pensions

State, local, and government employees; teachers and qualifying ERISA benefits

Personal Property

I acre burial plot; books, clothing, and pictures;  health aids; payments for lost earnings; personal injury up to $7500, wrongful death $10,000; combination or single benefit not to exceed $15,000

Public Benefits

Aid for the blind and disabled; veterans benefits; unemployment, workmen’s comp, and victims compensation; Social Security, elderly assistance, and public assistance

Wages

Minimum 75% of unpaid wages, plus $2.50 weekly for every dependent child

 

Tennessee Bankruptcy Court Filing Options

Need Bankruptcy Help?

Use a Bankruptcy Lawyer

A bankruptcy lawyer is strongly encouraged.  In addition to the moral support, a lawyer knows all of the applicable exemption, the legal nuances, the court proceedings, the answers to legal questions, all of the necessary legal documents, and pertinent legal advice. A lawyer prevents costly mistakes and misunderstandings.

Use a Filing Service

A filing service saves money; but, the debtor has no recourse, if the service makes a costly mistake or fails to file a document. The adverse consequences of poor service are both legal and financial.

File “Pro Se”

The court provides the means for a debtor to file on his/her own behalf.  However, filing pro se is risky.  Without extensive knowledge of Tennessee bankruptcy law, the debtor is inviting legal and financial negative consequences of self-representation.

Courts and Tennessee Bankruptcy Trustee Information

Tennessee Eastern District Court Main Office

Howard H. Baker Jr. United States
Courthouse, Suite 130
800 Market Street
Knoxville, TN 37902-7902

Tennessee Middle District Court Main Office

800 Estes Kefauver Federal Bldg
and United States Courthouse
801 Broadway
Nashville, TN 37203-3816

Tennessee Western District Court Main Office

242 Clifford Davis and Odell
 Horton Federal Bldg
167 North Main Street
Memphis, TN 38103

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