Bankruptcy For A Fresh Start In Tennessee

Many individuals have found themselves in financial constraints regardless of their upbringing, planning, and work history. The causes of an individuals financial issues may be from a divorce, loss of employment, business failure, unforeseen medical emergency, or any number of things. Regardless of the cause of the financial issues, the federal bankruptcy code was designed to help individuals who cannot pay their debts and protect creditors from abusive consumers. The two main consumer bankruptcy processes available to individuals are liquidation or repayment plans. A liquidation bankruptcy is known as Chapter 7 bankruptcy and the repayment plan/reorganization bankruptcy is known as a Chapter 13 bankruptcy or a wage earner plan.

Based in Johnson City, we at Herndon, Coleman, Brading, & McKee, LLP, are equipped to assess your financial situation and determine whether Chapter 7 can provide the relief you seek. With a combined experience of over 125 years, we are a team of experienced attorneys who can thoroughly evaluate all your options. We can expertly guide you through the process, ensuring that you access the complete benefits available under the U.S. Bankruptcy Code.

Chapter 7 General Information

As stated by the United States Supreme Court in Williams v. U.S. Fidelity & Guaranty Co., one of the main purposes behind the Bankruptcy Act is to “relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.” 236 U.S. 549, 554-555 (1915). To accomplish this goal the legislators designed a process that allows qualifying individuals to liquidate assets and pay back their debts.

Some people may be trepidations about filing a Chapter 7 because they believe they will have to sell everything the own, but the Bankruptcy Code allows individual to protect some of their assets from the claims of creditors through what is known as an exemption. In Tennessee an individual may be claim an exemption from creditor claims for tax exempt retirement accounts, health savings accounts, child support assets, burial plots, life insurance, accident benefits, health benefits, disability benefits, as well as may others.

A typical Chapter 7 bankruptcy takes and average of four (4) months from the date of filing the petition to receive a discharge making this the quickest process for individual debtors. However, not every individual will qualify for a Chapter 7 bankruptcy. Individuals must meet an income qualification, complete a credit counseling course, fill out the appropriate paperwork, and ensure that they are not the subject of a disqualification before filing.

Chapter 13 General Information

For individuals who don’t qualify for Chapter 7 due to income requirements, or who wish to save their home from foreclosure, or need to reschedule their secured debts, a Chapter 13 bankruptcy might be the best option. Under Chapter 13 bankruptcy an individual is able to gain a discharge through making qualified regular payments on an agreed upon repayment plan over three (3) to five (5) years. In this way, a Chapter 13 bankruptcy acts like a consolidation loan which the individual makes payments to the Chapter 13 trustee who then distributes the payments to the creditors according to the plan.

There are multiple requirements to qualify for a Chapter 13 bankruptcy, such as the individual must have a regular income and have less than Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000.00) of combined secured or unsecured debt. Additionally, the individual must complete all paperwork and attend a qualifying credit counseling course and submit a copy of any debt repayment plan developed through the course.

 Call Tennessee Bankruptcy Attorneys

 Bankruptcy is a difficult decision that should never be taken lightly.

If you are an individual struggling with financial issues and have questions concerning bankruptcy and whether a Chapter 7 or Chapter 13 are right for you, contact us today for a free consultation.

You can call our Johnson City office at 844-678-9750 or reach out online to get started on your debt discharge journey. 

How To Prepare

First, contact the attorney. Bankruptcy can be tricky and with the professional help it can ensure a quicker and easier filing process. We will send you a packet to fill out with many financial questions such as income, assets, debts, etc. Make sure to cancel all automatic payments and manage a budget and stick to it, prioritize the bills and necessities, and cut the luxuries no matter how so small. Make sure to have financial information as well as valid identification such as a drivers license, state ID, and/or social security.

Credit Counseling

The debtor must attend two credit counseling classes, one before filing and one after. There are many approved agencies to make things easy to find the fit for you. Worried about attending in person? No need to stress there are many agencies that provide classes over the phone and online to match your schedule.

What Happens After I File?

Immediately after filing the bankruptcy court will notify all listed creditors of your bankruptcy ceasing all collection. The court will then set a date for a “creditors’ meeting” that you and your lawyer will attend, the trustee appointed to the case will ask routine questions to ensure all information is correct. If there are no legal issues, then the court will typically release the debts 8 to 12 weeks following the filing.

Ours is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.