Different Types Of Bankruptcies
There are several different types of bankruptcies, but the majority of individuals can only file for Chapter 7, which is also known as liquidation bankruptcy, and Chapter 13 bankruptcy, which is also known as the wage earners plan.
Chapter 7 bankruptcy can help you wipe some or all your debts in a few months. However, you may have to surrender your assets like cash, property, etc. It stays on your credit reports for ten years.
Whereas with Chapter 13 bankruptcy, some of your debts will get discharged, but you can keep your property and repay the debt through a three to five year repayment plan approved by the bankruptcy court, says Hoorfar. It will stay on your credit report for seven years.
Navigating Your Bankruptcy Case
Bankruptcy is an unusual area of law because it’s essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because all rules apply in every case, you can’t skip a step.
One way to keep track of your research is to use the bankruptcy forms as an outline. You’ll find links to related bankruptcy forms and other exemption resources in the chart below. You can also look at the list of Chapter 7 and 13 bankruptcy forms to see where this topic fits in the bankruptcy scheme. And this handy bankruptcy document checklist will help you gather the things you’ll need to complete the petition.
|
More Bankruptcy Information |
Self-help services may not be permitted in all states. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Your use of this website constitutes acceptance of the Terms of Use, Supplemental Terms, Privacy Policy and Cookie Policy. Do Not Sell My Personal Information
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.
Read Also: Can I Rent After Bankruptcy
How Can I Get Rid Of Payday Loans
Payday loans are just one of many loan types eligible for Tennessee debt consolidation. Other debt that qualifies for consolidation includes:
- Debt from medical bills
- Overdraft fees on your bank account
If you cant get a Tennessee debt consolidation loan, your final option is to file for bankruptcy. Your credit score will temporarily decrease, but over time it will rebound, and your credit score will improve. Believe it or not, your score will actually recover faster than if you continued to struggle with overdue debt, late fees, and high interest credit cards. Bankruptcy affects your credit less as time passes, late payments, and loans with high balances hurt your credit every month.
In most bankruptcy settlements, you also get to keep your property, such as your car or home. While not ideal, it is an effective way to get rid of all types of debt and improve your credit score over time. Our skilled team at The Pope Firm can help you navigate the complicated world of debt consultation in Tennessee or assist you with the bankruptcy process if necessary.
Get rid of your high-interest payday loans, improve your credit, and start fresh. Schedule a free consultation today.
The information shared here should not be taken as legal advice and does not constitute an attorney-client relationship.
Youre Our First Priorityevery Time
We believe everyone should be able to make financial decisions with confidence. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.
Also Check: How Many Bankruptcies Did Trump Have
How Much Debt You Should Have In Chapter 13 Bankruptcy
Chapter 13 bankruptcy doesn’t have a minimum debt amount, but it does have debt maximums. If your secured and unsecured debt exceeds the limits, you won’t qualify. You’ll need to file an individual Chapter 11 instead. You’ll find current amounts in Chapter 11 vs. Chapter 13 Bankruptcy.
Most people don’t file Chapter 13 for the sole purpose of wiping out debt unless they don’t qualify for Chapter 7. Otherwise, Chapter 13 works best if you have a problem Chapter 7 can’t fix, such as stopping a foreclosure or repossession permanently. You can also pay off nondischargeable debts, such as support arrearages or new tax debt, over time using Chapter 13’s repayment plan.
What Not To Do Before Filing For Bankruptcy
As soon as you decide to file for bankruptcy, go ahead and consider your accounts frozen. In addition to, obviously, not taking on any new debt, dont make any steps to pay back anyone. While it may be a well-intentioned gesture, it will only lead to headaches.
Never transfer any assets prior to bankruptcy without consulting a bankruptcy lawyer first. People mistakenly assume certain assets may not be protected, so they transfer the assets out of their name, says Scott. That creates a huge problem because now the asset is sure to be lost to the bankrupt estate. Transferring an asset within two years of filing the bankruptcy for no value is considered a fraudulent transfer.
Second, do not pay business partners or family or friends any money you owe them prior to filing bankruptcy, says Scott. The payment might be construed as a preference and the payment may be avoided and brought back into the estate and paid to all creditors pro-rata. Again, best to consult with a quality bankruptcy lawyer before doing anything.
Don’t Miss: Requirements For Chapter 7 In Texas
Why A Bankruptcy Attorney Is Worth The Investment
Bankruptcy is one area of the law where it is vitally important to have an attorney. Bankruptcy laws are complex and there is a long list of things that one should and should not do before filing bankruptcy. Individuals who try to save money filing by themselves often end up paying money to the bankruptcy court because they did not understand how an action would affect them.
At Mathis, Bates & Klinghard PLLC, we know you are struggling financially. We believe everyone should have access to quality legal services. We strive to deliver value by offering outstanding bankruptcy services at a reasonable price. To schedule an initial consultation to discuss your options, call our law office in Clarksville at 919-5060 or schedule your consultation online.
Our attorneys are licensed in the Middle District of Tennessee and Western District of Kentucky.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Related to This
How To File Chapter 7 Bankruptcy
The most important factor in filing Chapter 7 bankruptcy is finding an experienced bankruptcy attorney. Once you decide on an attorney, you can refer creditors to your lawyers office. Filing the petition will trigger an automatic stay, which means creditors cant pursue lawsuits, garnish your wages or contact you about your debts. Heres a potential timetable:
If youre qualified, it will take 4-6 months to complete the bankruptcy process.
Here are the steps you must take when filing for bankruptcy:
Read Also: How Many Times Did Trump File For Bankruptcy
Home Equity Can Determine Which Type Of Bankruptcy You File
Jim and Dianne have been struggling to keep up with bills for some time. After she was injured on the job, Dianne couldnt work. Jims company laid him off, and after burning through their savings, the couple are buried under a mountain of medical bills and credit card debt. Recently, Jim returned to work. They have managed to keep up with their mortgage payments, though, and now they want to make sure they get out of their debts without losing their home.
For Jim and Dianne, the first question theyll need to answer is how much equity they have in their home. If they have significant equity, a bankruptcy court might insist they sell their home to settle debts. Or they could be asked to consider refinancing their mortgage and using the proceeds to pay down debt. With significant equity, Jim and Dianne will most likely pursue a Chapter 13 filing.
However, just because they own a home does not mean Chapter 7 is off the table. Thats because Tennessees homestead exemption law provides protections against home seizure during Chapter 7 bankruptcy. Essentially, the home is an exempt asset, and so long as the homeowner has maintained good standing with the mortgage company, they can usually keep their home.
Tennessee Bankruptcy Exemptions And Law
By Bret Thurman, J.D. | Reviewed by Bridget Molitor, J.D. | Last updated April 23, 2021
Recently, in a much-anticipated move, the Consumer Financial Protection Bureau eliminated some key consumer debt protections in federal law. The CFPB’s move was just the latest in a long series of rollbacks that have given debt collections more power than they’ve ever had before.
Recently, in a much-anticipated move, the Consumer Financial Protection Bureau eliminated some key consumer debt protections in federal law. The CFPB’s move was just the latest in a long series of rollbacks that have given debt collections more power than they’ve ever had before.
This power includes the ability to seize your property and sell it to pay your debts. In many cases, creditors do not need court orders to undertake such actions. Additionally, because they have so much power, many banks are unwilling to discuss things like payment plans and forbearance requests. Instead, they assume a take-it-or-leave-it negotiating posture.
As outlined below, bankruptcy shields your property from adverse creditor actions. The Bankruptcy Code gives honest yet unfortunate debtors the fresh start they need so badly.
Also Check: Bankruptcy Document Preparer
Payday Loan Debt Help In Tennessee
Tennessee payday loans can make a small debt into a major debt fast. The fees and interest can be astronomical, making it difficult to get out of debt once you get trapped in the cycle. If you are paying on Tennessee payday loans with high interest rates, you may be wondering if there is any way outthere is.
In fact, you have more than one option. First, you can look into a Tennessee debt relief or debt consolidation program for help. With these programs, you can work out a payment plan and pay off payday loans in single monthly payments. Another option is to file for bankruptcy to eliminate not only payday loan debt, but also high interest credit card debt, medical debt, and more.
What Are Other Possible Bankruptcy Fees
We now know that attorneys may charge more for complications. Your average bankruptcy case doesnt have any most are fairly straightforward. Youll file, youll either surrender your assets or work out a payment plan, youll get your discharge, and youll go on your merry way. However, not every case is so simple.
Bankruptcy isnt just about filing forms. Theres a lot of room for litigation, especially surrounding Chapter 7 exemptions. So, while attorney fees for an easy, open-and-shut Chapter 7 case will fall around $900-$1,500, most firms will charge more if court time becomes necessary.
For example, say the Bankruptcy Trustee objects to your valuation of some property you want to exempt. That question will have to be resolved in front of a judge. Your attorney will have to prepare a defense and appear in court, which will probably cost you a few hundred dollars extra. If someone files an adversary proceeding in your case , youre looking at a lot of research, preparation for a whole case, and plenty of court time. The bill for an adversary proceeding may well be in excess of $10,000.
Of course, these scenarios are relatively rare. Most cases proceed smoothly if you have a competent lawyer. However, the scenarios above are possible and you should be aware of them as you calculate the probable cost of your bankruptcy.
You May Like: Bankruptcy Petition Preparer Training
Avoiding Exemption Issues In Tennessee
If you don’t exempt your property carefully, you could lose it. Answers to these questions might help you steer clear of common issues.
Do I automatically get to keep exempt property? Generally, no. Here’s the procedure you’ll need to follow: You’ll select the exemption set that best protects your property, list the exempt assets and applicable exemption laws on Schedule C: The Property You Claim as Exempt, and file it with your other required paperwork.
Will someone check my exemptions? The bankruptcy trusteethe court-appointed official tasked with managing your casewill review Schedule C to ensure that you have the right to protect the claimed property. A trustee who disagrees with your exemptions will file an objection with the court. The judge will decide whether you can keep the property.
Example. Jeff owns a rare, classic car worth $15,000, but the state vehicle exemption won’t adequately protect it. Believing that the car qualifies as artat least in his mindJeff exempts it using his state’s unlimited artwork exemption. The trustee reviews Schedule C, disagrees with Jeff’s characterization and files an objection with the court. After consideration, the judge will likely side with the trustee, determining that the vehicle doesn’t qualify as a piece of art.
Am I Eligible For Bankruptcy In Tennessee
Many of the same eligibility requirements apply to all kinds of consumer bankruptcy filers. Everyone must complete two financial management classes, a pre-filing credit counseling course, and a post-filing budgeting course. There are some chapter-specific requirements as well. Some are written, and some are unwritten.
Don’t Miss: Has Trump Ever Filed Bankruptcy
How Do I File Bankruptcy In Knoxville Tn
When filing for Chapter 7 bankruptcy, its essential that you dont miss a step and provide the court with accurate information. Otherwise, your bankruptcy case may be subjected to delays or denial. In more extreme cases, inaccurate information can lead to fraud charges. Check out the steps to filing bankruptcy in Knoxville below.
Everyones situation is different. Your bankruptcy case may require more effort or less depending on many factors. If you have any questions, contact a bankruptcy lawyer in Knoxville at the Ooten Law Firm today.
Understand The Costs Of Filing Bankruptcy In Tennessee
When you file for bankruptcy, you need to understand the cost and affordability of bankruptcy. The costs primarily consist of the filing fee and the attorney fee . Firstly, most attorneys offer payment plans. Some also offer $0 down payment options. The cost of the attorney can be variable based on such factors like your location and the difficulty of the case.
We built this Tennessee attorney fee calculator to help you estimate costs based on your specific zip code.
If you cannot afford a payment plan, you may also look at the legal aid options in your state and also how the filing fee waiver works.
Legal Aid In Tennessee
There are certain situations where you could get help through legal aid. Please note that each legal aid may have criteria set for who they will help. Here are legal aid option in Tennessee.
Filing Fee Waiver in Tennessee
Theres a filing fee to file bankruptcy. You can check the Tennessee filing fee waiver requirements to see whether you may be eligible for the filing fee waiver.
Don’t Miss: Declare Bankruptcy Keep Car
