If you’re a Tennessee resident and are facing foreclosure, have experienced a job loss or are struggling with mounting medical bills, you have likely considered filing for bankruptcy. So what do you need to know before filing for bankruptcy in Tennessee? Nashville attorney Ron Nevin is an expert in Tennessee bankruptcy cases. Here Nevin explains Chapter 7 bankruptcy and talks about what you can expect to be left with after filing for bankruptcy in Tennessee.
Most people associate the concept of bankruptcy with having their debts permanently relieved. In reality, there is more than one type of bankruptcy. In a Chapter 13 bankruptcy, the debtor keeps his assets but agrees to a payment plan to eliminate his debt within a few years. When faced with a major financial setback, however, such as a job loss or costly illness, many people choose to file for a Chapter 7 bankruptcy.
Chapter 7 bankruptcy is what many people call a “straight” bankruptcy. In a Chapter 7 bankruptcy, most of your debts are discharged. When debts are discharged, you are no longer legally required to pay them and creditors are prohibited from taking any kind of collection action against you. Chapter 7 can eliminate credit card debt, medical bills, payday loans, judgments against you, deficiency debts, or repossessed motor vehicles. Chapter 7 does not, however, relieve you from child support responsibility, taxes or student loans.
Because bankruptcy is a federal law, filing for Chapter 7 bankruptcy in Tennessee is not much different than filing for bankruptcy in any other state. However, state law does play an important role in one area. The state in which you file for bankruptcy will determine the amount of money and assets you will be left with after your bankruptcy filing is complete.
When you file for bankruptcy, a portion of your assets will be exempt from your creditors. The exemption amounts in a bankruptcy filing are the amounts of money and assets you will have that are exempt from creditors. These assets and money are intended to help you get a fresh start after your bankruptcy. (There are separate exemptions for personal property and real property.)
Your personal property includes money you have in a bank, your household goods, any equity you may have in an automobile, or anything else of value that you own. When you file for bankruptcy, the amount of personal property you will be allowed to keep is determined by your state’s personal property exemption limits. In Tennessee, the personal property exemption for a single filer is $4,000. For a married couple, the personal property exemption is $8,000. The exempt amounts are for the equity in personal property after deducting any amount of debt on the property such as an automobile.
The real property exemption (or homestead exemption) is intended to allow you to stay in your home after your bankruptcy. This exemption, however, only applies to your primary residence. So, if you’re filing for Chapter 7 and happen to own more than one home, you will only be allowed to keep the home in which you live most of the time. In Tennessee, real property exemption amounts are $5,000 for an individual and $7,500 for a married couple. Some exceptions to this rule allow for greater exemptions for those people over 62 and for single parents.
If you are considering a bankruptcy filing in Tennessee, it’s essential that you contact an experienced attorney to help you determine whether Chapter 7 bankruptcy is the best course of action for you.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
