Chapter 13 Bankruptcy An Overview
The bills are stacking up, demanding calls and letters are arriving with increasing frequency and despite the best of efforts, the overdue debts just cannot be paid. In such cases, filing bankruptcy under Chapter 13 of the Bankruptcy Code may provide a solution to what seems like an insurmountable problem. Once considered a last resort, bankruptcy has evolved into an accepted method of resolving serious financial problems. If you are facing serious financial challenges, it is important to seek the counsel of an experienced bankruptcy attorney at Richard Banks & Associates in Cleveland, TN, to determine whether filing under Chapter 13 is right for you.
When Can A Creditor Garnish Your Wages In Tennessee
Most creditors cannot get a wage garnishment order until they have first obtained a court judgment stating that you owe the creditor money. For example, if you are behind on credit card payments or owe a hospital bill, those creditors cannot garnish your wages unless they sue you and get a judgment. Once a creditor has a judgment against you, they become a “judgment creditor” and can garnish your wages.
However, there are a few exceptions to this rule. Your wages can be garnished without a court judgment for:
- unpaid income taxes
- defaulted student loans.
Eastern District Of Tennessee Requirements
The Eastern District of Tennessee offers four locations in Chattanooga, Greeneville, Knoxville and Winchester. Please note, however, that the Winchester office is unstaffed. The court has jurisdiction over 41 counties. Chattanooga serves Bledsoe, Bradley, Hamilton, Marion, McMinn, Meigs, Polk, Rhea and Sequatchie counties. Greeneville covers Carter, Cocke, Greene, Hamblen, Hancock, Hawkins, Johnson, Sullivan, Unicoi and Washington counties. Knoxville serves Anderson, Blount, Campbell, Claiborne, Grainger, Jefferson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier and Union counties. Finally Winchester covers Bedford, Coffee, Franklin, Grundy, Lincoln, Moore, Warren and Van Buren counties.
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An Introduction To The Various Bankruptcy Options For Small Business Owners And The Pros And Cons Of Each
By Cara O’Neill, Attorney
Bankruptcy can offer struggling small business owners options to stay afloat or to close a business expeditiously. But not every business entity can file, or benefit from, each bankruptcy type. The following are a few of the options available:
- Under Chapter 11 bankruptcy, a small business with sufficient cash flow can stay open and make smaller monthly payments to creditors.
- A company without cash flow can use Chapter 7 bankruptcy to close efficiently and transparently.
- In some instances, a sole proprietor can keep a business open by filing a Chapter 13 bankruptcy, or even a Chapter 7 if the company provides services only.
Because a poor choice can negatively affect a debtor’s personal finances or subject the debtor to litigation, be sure to consult with a bankruptcy lawyer experienced in filing small business cases.
Bankruptcy: How It Works Types & Consequences
Bankruptcy is a legal process overseen by federal bankruptcy courts. It’s designed to help individuals and businesses eliminate all or part of their debt or to help them repay a portion of what they owe.
Bankruptcy may help you get relief from your debt, but it’s important to understand that declaring bankruptcy has a serious, long-term effect on your credit. Bankruptcy will remain on your credit report for 7-10 years, affecting your ability to open credit card accounts and get approved for loans with favorable rates.
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Filing Motions & Responding To Creditor Objections
$0 to $200
Depending on your circumstances these are two things you may or may not need to do.
Filing motions with the court. If creditors’ have placed claims on your property you may be able to have them removed by filing some extra paperwork.
Responding to objections. Your creditors or the bankruptcy trustee will have a certain number of days to object to statements on your forms. You may respond before the court has a hearing on the matter. Depending on the objection you may need to hire a lawyer to respond effectively.
Tip: If you are hiring an online service to prepare your bankruptcy papers, be sure to ask whether the standard fee includes filing motions for lien avoidance, or responding to the trustee’s or a creditor’s objection.
Understanding How Chapter 13 Bankruptcy Works
Chapter 13 bankruptcy is sometimes referred to as reorganization. It involves setting up a payment plan with the bankruptcy court to pay back either a portion of your debt or all your debt over a period of years. At the end of that time, whatever unsecured debt remains is discharged, just like a Chapter 7 bankruptcy.
Unlike Chapter 7, passing the Means Test is not necessary to qualify for Chapter 13 bankruptcy, but it will determine how long a plan will last. Generally, individuals who pass the Means Test may complete the plan in 36 months individuals whose income exceeds the Means Test are required to participate in a 60-month plan.
Chapter 13 bankruptcy offers the following benefits that are unavailable in a Chapter 7 bankruptcy:
- Catch up on debt Individuals who have fallen behind on house or car payments may file a Chapter 13 bankruptcy to get caught up on arrears while avoiding foreclosure or repossession.
- Pay off nondischargeable debt Certain debts are nondischargeable in a bankruptcy. Business tax debt and some individual income tax debt may be nondischargeable in bankruptcy. Chapter 13 plans enable individuals to pay off this debt without fear of garnishment.
- Reorganize debt People can reorganize their debt to get on firm ground again. Certain secured debts may be paid back at a lower interest rate, enabling individuals to make ends meet.
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How Bankruptcy Works In Divorce
In this article, well cover:
- What are the different types of bankruptcy relief?
- The two main types of debt: unsecured vs. secured
- Things to consider when deciding between Chapter 7 and Chapter 13
- Chapter 7: An Overview
- Which should happen first: divorce or bankruptcy?
- Individual Chapter 7 cases vs. joint Chapter 7 cases
- When it makes the most sense to file a divorce and allow it to conclude before filing a bankruptcy
What are the different types of bankruptcy relief?
When we are talking about an individual bankruptcy the most likely options are a Chapter 7 and a Chapter 13.
Chapter 7. A Chapter 7 bankruptcy is often referred to as a fresh start or a clean slate bankruptcy. It usually involves selling property to pay off your debts and then erasing whatever eligible debts remain. This is usually ideal for individuals who dont own expensive property like a house or a car.
Chapter 7 generally allows you to keep most, if not all, of your day-to-day property while also erasing your debts.
Chapter 7 bankruptcy is generally less complex, taking about 4 to 6 months. Although we discuss both bankruptcy Chapters, this article will focus on the relationship between divorce and Chapter 7.
Chapter 13. Chapter 13 bankruptcy will usually allow you to keep your house and your car but involves a 3-to-5 year repayment plan to settle a portion of your debt.
The two main types of debt: unsecured vs. secured
Things to consider when deciding between Chapter 7 and Chapter 13
What Are The Bankruptcy Exemptions In Tennessee
Submitted by the Bond & Botes Law Offices – Thursday, September 28, 2017
Under bankruptcy law, debtors are permitted to claim exemptions. Exemptions allow a debtor to exempt or remove property from the bankruptcy estate to protect it making it unavailable to the trustee or creditors for liquidation. Each state has its own exemption laws however, there are times when it is appropriate to use federal exemptions. An attorney would need to determine what set of exemptions a debtor should claim.
In Tennessee, there are exemptions for real property if it is your principal place of residence, personal property exemptions, and various other exemptions. This article strictly looks at the personal property and homestead exemptions.
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Us Trustee Program Extends Telephonic Or Video Section 341 Meetings
The U.S. Trustee Program has extended the requirement that section 341 meetings be conducted by telephone or video appearance to all cases filed during the period of the Presidents Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease Outbreak issued March 13, 2020, and ending on the date that is 60 days after such declaration terminates. However, the U.S. Trustee may approve a request by a trustee in a particular case to continue the section 341 meeting to an in-person meeting in a manner that complies with local public health guidance, if the U.S. Trustee determines that an in-person examination of the debtor is required to ensure the completeness of the meeting or the protection of estate property. This policy may be revised at the discretion of the Director of the United States Trustee Program.
Understanding How Chapter 7 Bankruptcy Works
The vast majority of people want to pursue bankruptcy because they are eager to complete bankruptcy quickly. Sometimes referred to as liquidation, this form of bankruptcy wipes away liability for unsecured debts such as medical debt, credit card debt and most unsecured loans.
Generally it takes approximately 90 days from the date of filing to receive a discharge. While this form of bankruptcy wipes away most debts, certain debts, such as home mortgages and auto loans, may be kept through the bankruptcy.
To be eligible for Chapter 7 bankruptcy, you must be able to pass the Means Test. The Means Test is a measurement of income for an average household of your size in your county. Your household income cannot exceed this number to qualify for Chapter 7 bankruptcy.
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Can I Get Free Bankruptcy Forms
Yes! All official federal and local bankruptcy forms are available free of charge. You can find the links you need by visiting our bankruptcy forms page.
If you want copies of bankruptcy forms with plain-language instruction and tips for filling them out, you might want to use a good self-help book like How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time, both published by Nolo.
Faqswhat Does It Cost To File For Bankruptcy
The costs depend on what type of bankruptcy you file.
For a typical Chapter 7, the fees are as follows:
- $25 for credit counseling
- $800 attorneys fees
- $335 court costs
- $25 for the 2nd credit counseling course
For a typical Chapter 13, the only upfront fee is the $25 for credit counseling. The attorneys fees and court costs are rolled into the monthly payment you make to the bankruptcy court.
WHAT SHOULD I BRING TO MY APPOINTMENT?Bring whatever you have. Dont let missing documents keep you from speaking with an attorney. That being said, eventually, certain information must be provided.
We must provide the court with copies of your drivers license, social security card, tax returns, and paystubs. It is very helpful if you have the name, address, and balance for anyone you owe money to. If you want to speak with the attorney and file bankruptcy all in one appointment, you should bring $25 for the credit counseling course.
But if you are missing any of these items, dont let that stop you from coming to see the bankruptcy attorneys at the Reaves Law Firm. Most people wait too long before consulting a bankruptcy attorney.
DO I HAVE TO LIST ALL OF MY DEBTS.Yes.
Everything you owe must be listed. Failure to do so can have bad consequences. If you want to voluntarily pay a particular creditor after the bankruptcy is over, you can do so.
We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.
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How Much Does It Cost To File For Bankruptcy In Tennessee
In 2021, Chapter 7 bankruptcy costs $338 in filing fees, unless you get a fee waiver from the court. And the filing fees for Chapter 13 are $313. But the cost of filing for bankruptcy is more than just the filing fee. You may also have to pay for:
When all is said and done, your bankruptcy case could cost you as much as $2,500 and as little as nothing at all. The total cost will depend on:
- whether you qualify for fee waivers
- whether you qualify for free legal aid services
- whether you handle the form preparation and filing yourself or pay someone to help you, and
- how complicated your financial situation isfor example, whether you’re facing imminent foreclosure, whether your debts involve child support or back taxes, and whether you have valuable assets that are not fully protected by an exemption.
Heres an overview of some of the costs that may come up during bankruptcy.
The Two Kinds Of Bankruptcy Most Consumers Use
This website focuses on the two most common types of bankruptcy filed by individuals: Chapter 7 and Chapter 13. But heres a quick summary of the six types of bankruptcy most commonly filed under the bankruptcy code they get their names from the chapters where they appear in the code.
Chapter 7 Bankruptcy
- Chapter 7 lets individuals wipe out most kinds of debt in just a few months.
- You get to keep certain kinds of propertyfor example, at least some of the equity in your home, your car, clothing, personal items, and property that is essential to your profession. This type of property is called exempt property, and many Chapter 7 filers find that exemptions cover most of what they own.
- If you have nonexempt property, the bankruptcy trustee will sell it to repay your creditors as much as possible.
- To qualify for Chapter 7, you must pass the means test, showing that your income is less than the state median income for your family size.
- Most bankruptcies filed in the U.S. are Chapter 7 bankruptcies.
Chapter 13 Bankruptcy
Is Bankruptcy Always The Right Answer
No. Honestly, bankruptcy is not always the right fit for everyone. If bankruptcy is not the right fit for you, we can assist you with other options, including negotiating a debt settlement plan, debt consolidation or loan modification. Restructuring debt or negotiating a reduced fee can work wonders to get you on the right track again.
Contact The Ooten Law Firm Today
Are you currently facing seemingly insurmountable debt? The bankruptcy attorneys at Ooten Law Firm are here to help. Our lawyers will help you choose the best debt relief option for your situation.
While you can file bankruptcy on your own, doing so can leave you vulnerable to delays and potential denials. Dont risk your financial future by going it alone. Work with one of the best bankruptcy lawyers in Knoxville today.
Contact the bankruptcy attorneys at Ooten Law Firm or give us a call at 865-259-0999 for your free consultation.
Know Your Bankruptcy Options
Our role is as a guide. We help you understand your options, you make the decision. When you meet with an attorney at our firm, we will empower you by helping you understand the bankruptcy process and advising you on what you can expect from each option. We put you in the driver’s seat by educating you about:
- Personal bankruptcy In personal bankruptcy, people have the option of filing as individuals or married couples. Once the decision to file has been made, the next challenge is often deciding whether to pursue Chapter 7 or Chapter 13 bankruptcy. We will explain the differences between Chapter 7 and Chapter 13 bankruptcy and advise you on which bankruptcy might be best for your unique situation.
- Business bankruptcy Individuals are not the only clients we serve. We also represent businesses and business owners who are struggling financially. Regardless of whether you are planning to close down the business or looking for detailed guidance on managing a business reorganization, we will help you manage every detail of your business bankruptcy.
Where Are The Bankruptcy Courts In Tennessee
Tennessee is divided into three federal court districts.
Chapter 7 bankruptcy cases in the eastern part of the state are filed with the U.S. Bankruptcy Court for the Eastern District of Tennessee. It has four locations, although the Winchester office is unstaffed:
Chattanooga: 31 East 11th St., Chattanooga, TN 37402,
Greeneville: 220 West Depot St., Ste. 218, Greeneville, TN 37743,
Knoxville: 800 Market St., Ste. 330, Knoxville, TN 37902,
Winchester: 200 S. Jefferson St., Winchester, TN 37398,
Chapter 7 bankruptcy cases in Tennessees middle counties are filed with the U.S. Bankruptcy Court for the Middle District of Tennessee. The Middle Districts main office is located in Nashville, but it maintains two satellite offices in Columbia and Cookeville. Their addresses are:
Nashville: 701 Broadway, Rm. 170, Nashville, TN 37203,
Columbia: 815 South Garden St., Columbia, TN 38401
Cookeville: 9 E. Broad St., Cookeville, TN 38503
Finally, Chapter 7 bankruptcy cases in the western part of the state are filed with the U.S. Bankruptcy Court for the Western District of Tennessee. It has two locations:
Memphis: 200 Jefferson Ave., Ste. 410, Memphis, TN 38103,
Jackson: 111 S. Highland Ave., Ste. 107, Jackson, TN 38301,
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The Different Types Of Bankruptcy
Depending on your situation, there are different types, officially known as chapters of bankruptcy, that you can file for. These different chapters of bankruptcy provide different results for different cases, and its important to have some knowledge on these chapters before filing for bankruptcy.
How Are Retirement Accounts Protected
Retirement accounts like 401s are protected, meaning they cant be seized or sold off during the bankruptcy period. This means that even after the bankruptcy has gone through, youll still have your retirement account in your name.
Most 401 accounts are considered exempt in bankruptcies because, in most scenarios, you are not getting income from retirement accounts. If you are, the amount of income youre getting from your retirement account is taken into consideration when you file for bankruptcy.
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