A Chapter 7 bankruptcy filing means that the debtor's remaining assets are placed with the bankruptcy court, which divides up the assets among the persons who are owed money. A Chapter 13 bankruptcy filing is used when the debtor has enough money to partially pay its debts and asks the bankruptcy court for a reorganization plan to pay outstanding bills. Under both filings the debtor may emerge from bankruptcy with most of the outstanding bills erased.
Places in Tennessee to File Bankruptcy
Tennessee has three federal court districts:
- Eastern (Chattanooga, Knoxville, Greeneville, and Winchester)
- Middle (Nashville)
- Western (Memphis and Jackson).
You must file your documents in the district that includes the county where you reside.
Tennessee's Income Limits for Bankruptcy Filings
If your average monthly income is less than Tennessee's median income, you are eligible to file Chapter 7. If not, then you are not eligible to file Chapter 7, unless you pass a stringent means test.
How Long Might a Chapter 13 Plan Last?
If your average monthly income is less than Tennessee's median income, your Chapter 13 plan cannot exceed 36 months, unless the bankruptcy court finds that good cause exists to extend the plan up to a maximum of 60 months. Otherwise, your Chapter 13 plan generally must be 60 months in length.
Tennessee Exemptions from Bankruptcy Proceedings
Exemptions are property that is allowed to be excluded from the bankruptcy proceedings. In Tennessee, federal exemptions are not available—debtors must use the state exemptions. Some of the most common state exemptions for Tennessee are:
- Homestead: Up to $5,000 for single or $7,500 for co-owners unless over 60, when limits increase to $12,500 for single and $20,000 for married owners. You may also claim an exemption if you have a two- to 15-year lease.
- Wages: Thirty times the federal minimum wage or 75 percent of disposable weekly income plus $2.50 per week per child.
- Personal property: Clothing, storage containers, bible, portraits, pictures, health aids, health savings accounts, education savings accounts, burial plot, clothing, food and fuel for six months, furniture, and kitchen utensils to $1,500, perpetual care funds, and personal possessions.
- Professional tools and books: Up to $1,900.
- Personal injury judgments: Up to $7,500, wrongful death judgments up to $10,000, total not to exceed $15,000.
- Pensions: Tax-exempt retirement accounts (401Ks), IRAs and Roth IRAs to $1,171,150, public, state, and local government, and public employees, teachers, and ERISA qualified benefits.
- Insurance: Disability, accident, health, fraternal society, life insurance and annuity benefits.
- Public benefits: Unemployment compensation, workers' compensation, assistance to the blind, aged and disabled, crime victims compensation and relocation assistance benefits.
- Alimony and child support.
- Miscellaneous: $4,000 of any personal property.
- Any applicable federal non-bankruptcy exemptions.
Get Help from a Bankruptcy Attorney
This article provides a brief, general introduction to bankruptcy. For information specific to your situation, please contact a Tennessee bankruptcy lawyer.