Chapter 7 Bankruptcy Knoxville TN

Filing for bankruptcy can sometimes be a confusing process. That’s especially true without the help of a proven bankruptcy attorney in Knoxville. Chapter 7 Bankruptcy is one of the most popular forms of debt relief across the nation. 

Before filing bankruptcy in Tennessee, there are a few things you should be aware of, such as:

  • What is Chapter 7 in Tennessee  
  • Qualifications for Chapter 7 (means test)
  • How much it costs to file bankruptcy in Tennessee
  • What the homestead exemption is in Tennessee
  • Advantages and disadvantages of filing bankruptcy
  • How to file bankruptcy in Knoxville

You can find the answers to these questions and more below. If you have additional concerns about filing bankruptcy in Knoxville, we’re here to help. Contact the Ooten Law Firm or give us a call today at 865-259-0999 for your free consultation. 

Continue reading to learn more about Chapter 7 bankruptcy in Knoxville.  

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is also known as a “liquidation bankruptcy.” Consumers often file Chapter 7 bankruptcy to rid themselves of certain unsecured debts. 

If you qualify for Chapter 7, a bankruptcy trustee will oversee the liquidation (sale) of your non-exempt assets. Examples of dischargeable unsecured debts include:

  • Credit card debt
  • Medical bills
  • Unsecured personal loans

The money from the sale of your property will go towards paying all or part of the debts you owe. 

The U.S. Bankruptcy Code allows for some property and assets (within a certain value) to be exempted from liquidation (i.e., home, car, household appliances, etc.). Once your unsecured debts are discharged, you don’t owe anything else. 

In many cases, people keep all (or most) of their property in Chapter 7. However, there is always a chance that your case could result in property loss. If you’re unsure about what to expect during the bankruptcy process, it’s recommended that you consult with an experienced bankruptcy attorney in Knoxville. 

What Qualifies a Person For Chapter 7 Bankruptcy? 

Not everyone qualifies for Chapter 7. Before filing Chapter 7, it’s 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 (from the prior six months) is less than the median income in Tennessee
  • You haven’t filed Chapter 7 or Chapter 13 within the last 181 days
  • You are an “honest” debtor and not trying to defraud your creditors 

It’s 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. 

How Much Does it Cost to File Chapter 7 Bankruptcy in Tennessee?

After learning about the potential benefits of Chapter 7, many people ask, “how much does it cost to file Chapter 7?” Fortunately, it costs the same to file Chapter 7 in Tennessee as it does in every other state. The filing fee for Chapter 7 bankruptcy is $338. 

There are certain fee waivers available if you qualify. If you don’t qualify for a fee waiver, you can request to make up to four installment payments within 120 days of filing. 

Advantages of Chapter 7 Bankruptcy in Tennessee

Overcoming debts can be challenging for anyone. That’s especially true if you have unsecured debts that are unsurmountable. In many cases, Chapter 7 offers advantages to consumers that they would otherwise not have. 

One of the most important aspects of Chapter 7 bankruptcy in Knoxville is the “automatic stay.” An automatic stay is a provision within the U.S. Bankruptcy Code that temporarily halts all debt collection activities such as collections calls, repossessions, lawsuits, etc.  

In addition to the automatic stay, there are many other advantages to filing Chapter 7, such as: 

  • Eradication of certain debts
  • Instant relief from harassment from creditors
  • Property exemptions 
  • Rebuilding your credit score
  • Chance to catch up on mortgage payments

While there are many benefits to Chapter 7, it’s not for everyone. Learn about the potential downsides of bankruptcy below. 

Downsides of Bankruptcy

Filing Chapter 7 bankruptcy in Knoxville isn’t the best option for everyone. There are other debt relief programs and opportunities available if Chapter 7 isn’t the route for you. A few drawbacks to filing for Chapter 7 bankruptcy include:

  • You won’t qualify for Chapter 7 if you make too much money
  • Secured debts don’t qualify 
  • Your credit score will temporarily decrease
  • Bankruptcy doesn’t get rid of all secured debts
  • You must still pay secured debts (i.e., mortgage, student loans, child support, etc.)
  • Co-signers are not protected 

If you are unsure if Chapter 7 is the right option for you, contact The Ooten Law Firm to speak with a bankruptcy lawyer in Knoxville today. 

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 you’re current on your mortgage payments

The homestead exemption in Tennessee is $5,000 for singles and up to $7,500 for married couples. It’s 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 can’t 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, it’s recommended that you speak with your Knoxville bankruptcy lawyer. 

How Do I File Bankruptcy in Knoxville TN? 

When filing for Chapter 7 bankruptcy, it’s essential that you don’t 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. 

  1. Gather your bankruptcy documents and identify debts
  2. Participate in an approved credit counseling course
  3. Fill out the bankruptcy forms
  4. File your forms with the bankruptcy court in Knoxville 
  5. Contact creditors to inform them of the “automatic stay” if you’re facing collections 
  6. Mail requested documents to the trustee
  7. Participate in a second credit counseling course
  8. Attend 341 Meeting of Creditors
  9. Await the discharge

Everyone’s 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. 

Contact The Ooten Law Firm Today - We Can Help 

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. Don’t 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.

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