Many people consider bankruptcy as a result of being unable to pay their bills. By filing for bankruptcy in Tennessee, you can get a fresh start and relieve your financial worries. Before you move forward, however, make sure you understand what the process entails. This blog post will provide an overview of how to file for bankruptcy in Tennessee and everything you need to know to make the best decision for you. Keep reading to learn more!
What Is Bankruptcy?
Bankruptcy lets people and businesses relieve themselves of their debt burdens. In bankruptcy, creditors are prevented from collecting from you, at least temporarily, by the automatic stay.
When You May Need to File for Bankruptcy
Filing for bankruptcy is not for everyone, so being aware of this before filing is important.
Here are some situations when you may need to file for bankruptcy:
- You’re struggling to catch up with your mortgage payments.
- Your creditors aren’t willing to work out a payment plan with you.
- You’re paying your essential living expenses with your credit cards.
- Debt collectors are contacting you or your house is being foreclosed on.
Is Bankruptcy The Only Solution?
If you are considering filing for bankruptcy, you should consider your options carefully. Alternatives to bankruptcy can be debt settlement or credit counseling, and you can consult an advisor to determine which is best for you.
By consolidating your debt, you can lower your monthly payments and save money on interest. Ultimately, this leads to faster debt repayment. You can also negotiate directly with your creditor. Bankruptcy can be avoided if you can come to an agreement.
The Types of Bankruptcy for Individuals
There are two main types of bankruptcies for individuals available in Tennessee: Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is usually considered first since it is quick and does not require payments to creditors. Furthermore, this is an excellent option for those who only need minimal living and working necessities so they do not lose unnecessary luxury items. However, Chapter 7 bankruptcy cannot be used to catch up on mortgages or car payments, so if you are delinquent when you file, you may lose them.
Chapter 13 bankruptcy, in contrast, allows for repayment over a period of three to five years. The advantages of Chapter 13 over Chapter 7 include the ability to keep all of your property and avoid foreclosure and repossession. In the event that your debt cannot be discharged by bankruptcy, you can also negotiate a payment plan with your creditor.
How to File for Bankruptcy in Tennessee
Many people are discouraged from filing for bankruptcy because they fear that they will not be able to hire a lawyer. Though bankruptcy attorneys are expensive and the most costly part of filing for bankruptcy in Tennessee, you do have the option to file for bankruptcy without an attorney.
Below are the steps to do so.
- Gather Your Tennessee Bankruptcy Documents: Make sure you have copies of your tax returns from the past two years, a bank statement showing the bankruptcy filing date, and your last 60-day pay stubs.
- Take a Credit Counseling Course: Learn more about the credit counseling course here.
- Fill Out the Bankruptcy Forms: The forms are available free of charge at USCOURTS.gov.
- Pay Your Filing Fee: Chapter 7 bankruptcy requires a court filing fee of $338. If your income does not exceed 150% of the poverty guidelines in Tennessee, you can request a fee waiver.
- Print Your Bankruptcy Forms: Make sure to print all forms on regular, white 8.5″ x 11″ paper using black ink.
- File the Forms With the Tennessee Bankruptcy Court: Bankruptcy documents must be filed in person or by mail in Tennessee. If you need the forms dropped off by another person, contact the court clerk, but it’s best to go in person in case a signature is missing, or there’s a small technical error.
- Mail Documents to Your Trustee: You will be assigned a trustee after filing for bankruptcy.
- Take Another Course: Sign up for a debtor education course within 60 days of the 341 meeting.
- Attend Your 341 Meeting: Your creditors can attend this meeting to ask questions.
What Happens After You File for Bankruptcy in Tennessee?
Generally, most of your unsecured debts will be discharged when you file for bankruptcy. However, bankruptcy cannot discharge certain debts, including student loans, child support, and alimony. Depending on your bankruptcy choice, you may also have to give up some assets.
How Will Bankruptcy Affect My Credit Score?
Bankruptcies can stay on your credit report for seven to ten years following filing. It may be difficult to obtain loans and credit lines as a result. It is important to realize, however, that bankruptcy is not the end of your financial future.
The following practices can help you rebuild your credit:
- Apply for a small loan.
- Make on-time payments.
- Get a secured credit card.
- Maintain a good payment history.
- Regularly check your credit report for errors.
- Become an authorized user on a credit card.
Sell Your House for Cash & Avoid Bankruptcy in Tennessee
If you’re daunted by the prospect of filing for bankruptcy, the fastest way to avoid it is by selling your house. At Favor Home Solutions, we buy houses as-is for cash, so you don’t have to worry about making repairs or dealing with the emotional stress or hassle that comes with bankruptcy.
We’ll work together to develop a solution that meets your unique needs within your preferred timeframe! Get the cash you need in as little as 14 days and regain your peace of mind. Contact us today to learn more about how we can help you!