Chapter 7 Bankruptcy Lawyers Knoxville

Knoxville Chapter 7 Bankruptcy Lawyer

Helping folks with unsecure debts get a fresh start in Tennessee

Hundreds of thousands of people file for Chapter 7 bankruptcy every year. You don’t need to provide an explanation for why you filed. You just need to have unsecured debts that you can’t pay in a timely manner. Most folks consider Chapter 7 when they start getting collection letters from creditors or creditors start legal actions. At LaFevor & Slaughter, we understand how upsetting it is to be in financial distress. Take a deep breath. Our Knoxville Chapter 7 bankruptcy lawyers will help you start over.

How can we help?

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When should your consider filing for Chapter 7 bankruptcy in Knoxville?

Most of the people who file for Chapter 7 bankruptcy in Tennessee have unsecured consumer debts. These debts include:

  • Credit card debt
  • Medical bills
  • Collection agency accounts
  • Unsecured loans
  • Unsecured payday loans
  • Utility bills
  • Civil court judgments (not based on fraud)
  • Social Security overpayments
  • Other debts that are not secured by collateral – such as a home or a car.

Generally, if you have little or no disposable income after you pay your essential bills (rent, food, clothing, and other necessities), you should consider filing Chapter 7.

You can’t use a Chapter 7 bankruptcy to discharge your obligation to pay child support, alimony, student loans, HOA fees (if you want to keep your home or condo), tax liens, and other “priority” debts that our Knoxville Chapter 7 bankruptcy lawyer will explain.

There are some eligibility issues including residency requirements, if you filed a prior bankruptcy of any type, and what happened, and whether you can pass a means test.

What is the Chapter 7 means test?

Since 2005, anyone who files for a Chapter 7 bankruptcy must pass a “means test.” The means test examines your income and your family size. Your income is examined for the six months prior to your filing date. Some income, such as Social Security retirement income, is not counted when determining your income amount for the means test. We’ll explain what income you can exclude.

If your income is below the median for the Knoxville area based on your family size, you can proceed with Chapter 7 bankruptcy. Otherwise, you’ll need to file Chapter 13 bankruptcy where you’ll pay off your unsecured debts over a three-to-five-year period.

Most Chapter 7 filers pass the means test.

If you fail the means test, our Knoxville Chapter 7 bankruptcy lawyer will help you get a second chance to qualify for Chapter 7 by itemizing how much of your income you spend on rent/mortgage, food, clothing, medical costs, and other essential bills. If you pass this test (the Bankruptcy Court will review the details), then you can still proceed with Chapter 7.

How does the Chapter 7 bankruptcy process work?

There are some key steps you must complete before you file for Chapter 7 in Tennessee. Our bankruptcy lawyer will explain these steps.  You’ll need to:

  • Complete numerous forms. These forms list all your income, assets, liabilities, and expenses. The value of each asset will be included. We’ll help you identify and value all these items.
  • Attend a pre-bankruptcy credit counseling course. These courses (online and in-person) are sessions that discuss credit counseling. The cost is about $20-$100.
  • You’ll need to pay the court costs of filing a Chapter 7 petition. The costs (a few hundred dollars) vary by state. Some exceptions may apply if you’re truly indigent.

As soon as you file your Chapter 7 petition, the Bankruptcy Court will issue an “automatic stay.” The stay means that creditors must immediately stop any collection actions and any legal actions. Some creditors, such as secured creditors and priority creditors, can seek relief from the automatic stay.

After you file your Chapter 7 bankruptcy petition in the Bankruptcy Court for the Eastern District of Tennessee, a trustee in bankruptcy will be appointed to supervise your case. The trustee will inform all the creditors that you listed on your forms that you’ve filed for bankruptcy.

The trustee will set a time for a creditors’ meeting to review your finances. In most cases, the meeting involves just you, your lawyer, and the trustees. Creditors have the right to appear and question you – but they usually don’t appear.

You’ll need to attend a second counseling session (called “debtor education”) to help you succeed when your bankruptcy is discharged.

About six months after you file, unless there is anything unusual, the trustee should recommend that your debts be discharged. The bankruptcy judge will then sign your discharge order.

Can I protect any of my assets in a Chapter 7 bankruptcy?

Chapter 7 can protect certain “exempt” assets. In Tennessee, debtors can protect many different types of assets including personal property (furniture, clothes, jewelry, and many other assets, tools of the trade, Social Security retirement benefits, VA benefits, and even a limited equity in a home. Our Knoxville Chapter 7 lawyer will explain, before you file, which assets you can keep during and after bankruptcy.

You can also protect some secured assets if you agree to “reaffirm” your debt obligation. For example, Chapter 7 filers can reaffirm their obligation to continue their car payments so they can keep their cars.

Can I start over after Chapter 7 discharge?

While starting over after a bankruptcy isn’t easy, with diligence, you should be able to restore your credit. You should try to build a cash reserve before you consider obtaining any new credit cards or obligating yourself to any other expenses other than the essentials.

Some creditors may extend credit because you’re now debt-free. Most creditors will need to be sure you have a good-paying job. Some creditors may even require that you have a guarantor.

Your bankruptcy stays on your financial record for 10 years.

Do you have a Knoxville bankruptcy lawyer near me?

LaFevor & Slaughter is located at 900 South Gay Street, Suite 2006, in Knoxville. We maintain an additional office in Maryville. We also advise clients by phone and through video conferences. We’ve helped many people who are suffering financially obtain Chapter 7 bankruptcies and start fresh.

Speak with a caring Knoxville Chapter 7 bankruptcy attorney today

Everyone wants to pay their bills. Some people just can’t because life happens or they overextended themselves. At LaFevor & Slaughter, we’ll explain how Chapter 7 can benefit you. Most people are approved for Chapter 7. Most don’t need to file again. Our Knoxville bankruptcy attorneys are ready to give you peace of mind and protect your financial future. Call us or fill out our contact form to schedule a consultation.