Filing for Chapter 7 bankruptcy in Tennessee involves a legal process designed to help individuals and businesses eliminate their unsecured debts. Here are the general steps involved in filing for Chapter 7 bankruptcy in Tennessee:
- Determine Eligibility: Before filing for Chapter 7 bankruptcy, you must determine if you are eligible. Eligibility is typically determined through a means test, which assesses your income and expenses. If your income is below the median income for your household size in Tennessee or if you can pass the means test, you may be eligible to file for Chapter 7 bankruptcy. However, certain circumstances and debts may impact your eligibility.
- Credit Counseling: Before filing for bankruptcy, you must complete a credit counseling course from an approved agency. This course will help you evaluate your financial situation and explore alternatives to bankruptcy. You can usually complete this course online or over the phone.
- Hire an Attorney (optional): While it’s possible to file for Chapter 7 bankruptcy without an attorney (pro se), it is highly recommended to hire an experienced bankruptcy attorney. They can guide you through the complex legal process, ensure you follow all the necessary steps, and help you protect your assets to the greatest extent possible.
- Gather Financial Information: You will need to gather all your financial documents, including income statements, expense records, a list of assets, debts, and any contracts or leases. This information will be used to complete the bankruptcy forms.
- Complete the Bankruptcy Petition: With the help of your attorney or on your own, you will need to complete the required bankruptcy forms, including the Petition, Schedules, and Statement of Financial Affairs. These forms detail your financial situation, assets, debts, income, and expenses.
- Filing the Petition: Once your bankruptcy forms are complete, you will file them with the U.S. Bankruptcy Court for the district in Tennessee where you reside. You will also need to pay a filing fee unless you qualify for a fee waiver.
- Automatic Stay: Upon filing your Chapter 7 bankruptcy petition, an automatic stay goes into effect. This prevents creditors from attempting to collect on your debts, including lawsuits, garnishments, and harassing collection calls.
- Attend the 341 Meeting of Creditors: You will be required to attend a meeting with your bankruptcy trustee and creditors (if they choose to attend). This meeting is called the “341 Meeting of Creditors.” The trustee will ask you questions about your financial situation, and creditors have the opportunity to ask questions as well. It’s important to be prepared for this meeting and to answer questions honestly.
- Liquidation of Non-Exempt Assets: In a Chapter 7 bankruptcy, a trustee is appointed to review your assets and determine if there are any non-exempt assets that can be sold to repay your creditors. Tennessee law and federal bankruptcy exemptions allow you to protect certain assets from liquidation.
