Important: Chapter 7 Qualification Via Tennessee Means Test
An important element in filing for bankruptcy relief is the Bankruptcy Means Test. The Means Test is a bankruptcy form that calculates your average monthly and annual income. The test compares your income against the median income of other households in Tennessee.
If your average annual income or median income is below the Tennessee median income, you may qualify for a bankruptcy discharge under Chapter 7. You can estimate whether you qualify for a Chapter 7 bankruptcy using the free Tennessee Chapter 7 Bankruptcy Means Test Calculator below.
Choosing The Right Bankruptcy Attorney
Though it is natural to be concerned about pricing, particularly if you are having financial difficulties, attorney fees should not be your primary concern in choosing a bankruptcy attorney. While there is some variation in attorney fees, attorney compensation is typically very small in comparison with the amount of debt that you will be clearing in a Chapter 7 case or resolving in a Chapter 13 bankruptcy. Schedule a free consultation with the bankruptcy attorney you are considering, and make sure that you are comfortable working with him or her, and feel you can rely on the attorneys knowledge and experience.
To schedule a free consultation with an experienced bankruptcy attorney at Bond & Botes, fill out the contact form on this page or call .
What Is Chapter 7 Bankruptcy In Tennessee
A chapter 7 bankruptcy case is a form of bankruptcy where the trustee gathers and sells the debtors non-exempt assets and properties. The proceeds of this sale are then used to pay the debts owed to any creditors. The Bankruptcy Code allows the debtor to keep exempt assets after filing but all other assets will be liquidated by the trustee to pay the debt. Therefore individuals are asked to keep in mind that filing for chapter 7 may involve the loss of assets and property including houses, cars and jewelry.
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Confirmation Of Bankruptcy Filing Qualification
After the meeting of creditors, the bankruptcy trustee will have enough information to decide whether you will qualify for Chapter 7 bankruptcy. The trustee will look for nonexempt assets and will decide whether its worth it to liquidate nonexempt assets. The trustee may do this by understanding the retail value of the asset and whether it will sell.
The secured debts such as a vehicle will need to be dealt with around this point in the process. You can often reaffirm the debt as an asset, which is very common for vehicles.
What Are Bankruptcy Exemptions
Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.
Unless otherwise noted, all law references are to the Tennessee Code Annotated.
- $5,000 $7,500 for joint owners. Tenancies by the entirety are exempt without limit as to debts of one spouse. Spouse or child of deceased owner may claim. May also claim a life estate or a 2 to 15 year lease. If over 62 years of age, $12,500 for single people and $20,000 for married people $25,000 if spouse is also over 62 years of age.
- Clothing and storage containers schools books, pictures, portraits, and bible.
- Health savings accounts.
- Health aids lost earnings payments for yourself or a person you depended upon personal injury recoveries up to $7,500 wrongful death recoveries up to $10,000 .
- Burial plot up to 1 acre.
- The greater of the following: 30 times the federal minimum hourly wage or minimum of 75% of disposable weekly income, plus $2.50 per week per child. Judge may approve more for low income debtor.
- Wages of debtor deserting family, in hands of family.
- Educational scholarship trust funds and prepayment plans.
- You can exempt up to $10,000 of any type of personal property.
How Much Does It Cost To File Bankruptcy In Tennessee
Submitted by the Bond & Botes Law Offices – Thursday, December 12, 2019
If you’re considering filing for bankruptcy in Tennessee, you are undoubtedly facing significant financial challenges. And, if you are like most people who ultimately file for bankruptcy protection, you may have been struggling with those issues for some time. So, it makes sense that you would be concerned about the costs associated with filing bankruptcy.
Costs of bankruptcy fall into several different categories, which include:
- The required pre-filing credit counseling and pre-discharge financial management course
- Bankruptcy court filing fees
In rare cases, there may be additional costs associated with a consumer bankruptcy case. For example, if valuation of a significant asset is in dispute, it may be in the bankruptcy petitioners best interest to hire an expert appraiser. However, this type of additional expense is rare. In most cases, all expenses associated with bankruptcy fall into one of the 4 categories listed above.
So How Do I Qualify For Chapter 7 Bankruptcy In Tennessee
Chapter 7 bankruptcies are intended for people who cannot afford to pay any portion of their debts. However, you must first pass an income evaluation to qualify for a bankruptcy discharge in Chapter 7.
If you pass the Tennessee bankruptcy means test , you can erase most unsecured debts through Chapter 7. Unsecured debts discharged in Chapter 7 include medical bills, personal loans, some old income tax debt, old utility bills, credit card debts, and most personal judgments. Unsecured creditors hold debts that are not secured by collateral.
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What Is Chapter 11 Bankruptcy In Tennessee
Bankruptcy cases filed under Chapter 11 are referred to as reorganization bankruptcy. This type of bankruptcy allows the debtor to remain in possession and with court approval will continue to run the business. A plan that reorganizes the debt and creates a payment plan is proposed. Creditors affected by the debt are also to review and then vote on the plan which can be approved by the court if it gets sufficient votes and satisfies other legal requirements. The plan may involve liquidation of company assets, infrastructure, and staff downsizing, or possible debt renegotiation.
File Your Forms With The Tennessee Bankruptcy Court
In Tennessee, you must file your bankruptcy documents by mail or in person. Only attorneys can file electronically. You can call the court clerk to see if another person can drop off the forms for you, but itâs best to go in person in case youâre missing a signature or thereâs a simple technical error you can fix.
When you go to the bankruptcy court to file your case, you must have your filing fee or application for a waiver or installment payments, your bankruptcy documents, and a list of all of your creditors. If you donât bring all of these, your petition to file bankruptcy can be rejected, and you wonât be able to file. As soon as your case is time-stamped the protection of the automatic stay goes into effect, and creditors will not be able to harass or contact you directly.
Before you go to file your case, check the courtâs current COVID-19 measures to make sure your preferred method of filing is available.
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Can I Keep My House If I File For Chapter 7 In Tennessee
The majority of people who file for bankruptcy in Knoxville keep their homes. Generally, whether you can keep your house when filing Chapter 7 in Tennessee depends on:
- How much equity you have in your home
- The homestead exemption amount in Tennessee
- If youre current on your mortgage payments
The homestead exemption in Tennessee is $5,000 for singles and up to $7,500 for married couples. Its important to note that the homestead exemption in Tennessee only applies to homes that are considered a principal place of residence. That means that you must live in the house.
If you cant afford the mortgage payments on your home, it can sometimes be advantageous to surrender your house during the bankruptcy process. Before deciding what to do with your home, its recommended that you speak with your Knoxville bankruptcy lawyer.
Filing For Bankruptcy In Tennessee
Below you will find links to information about bankruptcy in Tennessee. You will also find out how to ask a lawyer a question and how to get a lawyer to represent you, if needed. Some areas of the state have more information than others. You may look at information from other areas as well as your own.
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Will Filing Bankruptcy In Tennessee Erase My Debts
Bankruptcy wipes out many bills, like , overdue utility payments, medical bills, personal loans, and more. You can even get rid of a mortgage or car payment if you’re willing to give up the house or car that secures the debt.
But you can’t discharge all debts. Nondischargeable debts, like domestic support arrearages and recent tax debt, won’t go away in bankruptcy, and student loans aren’t easy to wipe out . You’ll want to be sure that bankruptcy will discharge enough bills to make it worth your while.
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 debtors 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.
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Will I Lose My Belongings If I File Chapter 7 Bankruptcy Understand Tennessee Bankruptcy Exemptions
Bankruptcy exemptions protect the equity in your property in a bankruptcy case. Likewise, property not protected by bankruptcy exemptions may be sold in a Chapter 7 liquidation case. Note also that for Chapter 13 cases, non-exempt equity in the property can increase the bankruptcy plan payment.
The most important asset most people like to protect is their home. See the Tennessee bankruptcy homestead exemption below.
The homestead exemption is often broken down by age and whether you are married.
- Single and under 65:
- Single is 65 or older:
Tennessee specific homestead bankruptcy exemption text: Tenn. Code Ann. § 26-2-301. $7,500 unmarried / $12,500 unmarried 62+ / $20,000 married and one spouse 62+ / $25,000 married and both spouses 62+
It is important to review additional Tennessee bankruptcy exemptions and choose those exemptions that best protect your assets.
The federal bankruptcy exemptions are detailed in 11 U.S. Code §522. The National Consumer Law Center maintains a list of federal bankruptcy exemptions on its website. Tennessee is a state that does not allow you to use federal bankruptcy exemptions
Always check that you use the most current information available when analyzing bankruptcy exemptions.
What Qualifies A Person For Chapter 7 Bankruptcy
Not everyone qualifies for Chapter 7. Before filing Chapter 7, its important to understand the requirements for doing so. According to the U.S. Courts, debtors must pass a means test to ensure they are eligible for Chapter 7 bankruptcy. Qualifications include, but are not limited to:
- Completion of a credit counseling program at least 180 days before filing
- Your average monthly income is less than the median income in Tennessee
- You havent filed Chapter 7 or Chapter 13 within the last 181 days
- You are an honest debtor and not trying to defraud your creditors
Its essential to note, if you fail the means test, you can potentially file Chapter 13 instead. Contact us today to speak with a bankruptcy lawyer in Knoxville.
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Take Second Mandatory Debt Education Course
You must take a second mandatory debt education course in Tennessee before filing for discharge. Once you receive the certificate of completion, your attorney or you would add that into your filing to show proof of completion.
See the list of approved debtor education courses in Tennessee. Once filed, you now just have to wait for discharge.
D Tennessee Debt Payoff Planning
You may be able to get out of debt through debt payoff planning, which is often a combination of trying to reduce expenses and putting extra cash into specific debts to avoid interest. You may not be able to do this because of the size of the financial hardship, but if you are interested, we build the Savvy debt payoff planner to help prioritize your debts. The app saves about $2,000 in interest on average by using the savvy debt payoff method instead of the snowball debt payoff method.
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Bankruptcy And The Pope Firm Was Very Helpful
I recently went through bankruptcy and the Pope Firm was very helpful in a very embarrassing situation. They went through the process of how bankruptcy works and made what could have been a very difficult time much easier to handle. I would recommend this law firm to anybody who is going through a bankruptcy. Everyone there is very knowledgeable and willing to answer any questions.
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What Is Virginiadebtrelieforg
VirginiaDebtRelief.org is a free resource where residents may find help through free do-it-yourself tools. In addition, residents may request a free evaluation and savings analysis to find out which of their bills are eligible for assistance.
Were here to help you. Weve served over 500,000 Virginia residents since 2009.
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C Tennessee Debt Management
Debt settlement companies negotiate lower amounts. Debt management companies negotiate lower interest rates. This is the key distinction. Often these programs last 3 or 5 years. This option is often more expensive than debt settlement and some creditors such as personal loan lenders may not work with the debt management company. There may be debt management credit score implications as well.
Who may debt management in Tennessee best for? Debt management may be best for those that have all high-interest credit card debt, and a reduction from 22-30% interest rate to a 10% interest rate would continue to make the debt affordable.
Filing Bankruptcy In Tennessee: 4 Things You Need To Know
You are looking to file bankruptcy in Tennessee. The most important things to understand are the process, qualification, costs, risk of losing belongings, pros and cons, and alternatives. The purpose of this article is to provide this information and personalized information based on your unique situation from our bankruptcy calculators.
Firstly, you need to know that bankruptcy is a legal debt relief option. It can help you eliminate debt, protect you from creditors, and give you a fresh start. In fact, in Tennessee, there were 17,280 from for the past year ending June 30th, 2021. Bankruptcy can even allow you to save for retirement.
You will notice that steps 1-7 below are to help you research whether and how to file for bankruptcy in Tennessee. Steps 8-15 are the actual bankruptcy process.
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Chapter 7 Bankruptcy Tennessee Income Limits
The Tennessee median income figures for the Means Test are adjusted periodically, based on IRS and Census Bureau data. Tennessee median income for bankruptcy cases filed on or after April 1, 2022, is:
|# of People|
For Tennessee households with more than 9 members, add $9,000 for each additional family member. You should always double-check the US Trustees website for the most current figures when calculating the Means Test.
Take A Credit Counseling Course
Under the bankruptcy laws for Chapter 7, all filers have to take a credit counseling course before filing a Chapter 7 bankruptcy petition. The purpose is to make sure that youâre aware of your debt relief options. Most agencies offer online or phone options to complete these courses, but you may be able to complete your course in person, depending on current COVID-19 regulations and which provider you choose to take the course from.
You need to complete the course 180 days before you file your bankruptcy case, and you have to take it from an authorized provider. The course will cost money, but you can apply for a fee waiver to take the course for free. Youâll also need to take a second debtor education course after you file bankruptcy, and some credit counseling agencies offer both courses for one fee.
You wonât be stuck for the whole day in class, the course usually only takes an hour or two. When youâre done with the course, youâll get a certificate of completion. You need to file the certificate with the rest of your documents when you file for your Chapter 7 bankruptcy case at the bankruptcy court.
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What Is The Downside Of Filing For Bankruptcy In Tennessee
One of the potential downsides of filing for bankruptcy comes in the form of the stigma that follows it. Most companies will usually cancel the credit cards and lines of credit of an individual that has filed for bankruptcy automatically. The filer’s credit score will also drop depending on the type of bankruptcy filing. Chapter 7 bankruptcy affects the credit score for 10 years while chapter 13 affects it for 7 years. Other downsides of filing for bankruptcy are
- Employment and housing difficulty as employers and landlords may deny applications due to any recent filings
- Increased difficulty in obtaining mortgages and loans
- Denial of tax refunds
- Loss of property, real estate, and other luxury items not covered by exemptions
- Non-dischargeable debts such as child support, student loans, fines, and alimony cannot be eliminated by filing for bankruptcy.