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Tennessee Bankruptcy

Tennessee Bankruptcy


Tennessee Bankruptcy Law


Tennessee bankruptcy laws that reflect federal laws and closely relate to other states’ bankruptcy laws.  The state is often known for heavier limitations on exemptions and it’s becoming harder and harder for some people to file under Chapter 7.  Regardless, the bankruptcy laws are still in place to help a person through a tough economic period and save their credit in the long term.  


Similar to other states, a person much attend a credit counseling course six months before filing for Tennessee bankruptcy.  The same person must show proof of attending a debtor education course before a final settlement is reached. 


Tennessee Bankruptcy : Personal and Corporate


Families and corporations can file for Tennessee bankruptcy under multiple chapters.  The most common forms of bankruptcies for individuals and families are Chapter 7 and Chapter 13, and the most common form of TN bankruptcy for a corporation is Chapter 11. 


TN Bankruptcy : Chapter 7


This type of bankruptcy usually tailors to families or individuals with large amounts of unsecured debt and limited amounts of income.  This type of bankruptcy is often referred to as liquidation or straight if the matter is handled quickly in a court of law.


In order to qualify for Chapter 7, a family’s household income must generally fall below the state average.  Tennessee’s average household income is around $41,461, and the state’s unemployment rate is fairly high at 9.7%.  A person can apply for Chapter 7 even if they are receiving unemployment benefits, but the judge has the final decision in a Chapter 7 case.  A family’s income may even fall below the state average and a judge may still make the family file for Chapter 13.  If qualified, a family or individual may receive the following exemptions:


• Up to $7,500 of homestead if jointly owned

• Up to 75% of wages

• $10,000 of personal property

• Wildcard 


TN Bankruptcy : Chapter 11


If a corporation is facing economic instability, an owner may choose to file for Chapter 11.  This type of bankruptcy allows a corporation to reorganize their expenses and change their business strategy in order to reduce debt and increase profits.  


TN Bankruptcy : Chapter 13


A person or family may choose or be forced to file Chapter 13.  The main advantage in filing Chapter 13 is that person or family can often keep their home during the repayment period of three to five years.  Also, assets aren’t put up for sale, but a family is forced to “reorganize” so they can pay structured payments to reduce their debt by more than 25%. 




A creditor may collect state and federal tax returns if a person or family files a Chapter 7.  These tax returns are generally guarded under Chapter 13, and in some rare cases, a person may even be pardoned from paying backed taxes to the IRS. 


Filing for Tennessee Bankruptcy


If you are considering filing for Tennessee bankruptcy, you should talk with a lawyer as soon as possible.  A Tennessee bankruptcy attorney can help you turn in the right documents, files, and fees at the right time, and they can usually obtain the best settlement when meeting with your creditor.  If you can’t afford an attorney, you can also file for TN bankruptcy through a state filing service.