Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Tennessee. However, state law plays an important role, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Before you file for Chapter 7 or Chapter 13 bankruptcy in Tennessee, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of agencies in Tennessee that have been approved to provide this counseling.
Where to File
Like every other state, Tennessee has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
In Tennessee, you must use the state’s exemption list; although some states allow debtors to choose between the state list and a federal list, Tennessee isn’t one of them.
Tennessee allows debtors to exempt up to $5,000 in real property, $7,500 for joint owners, and up to $25,000 if you have a least one dependent minor child. If you are 62 or older, you can exempt up to $12,500 in real property if you are single, up to $20,000 if married, and up to $25,000 if your spouse is also 62 or older. In Tennessee you can also exempt bibles, school books, family pictures, health aids, clothing, health savings accounts, among other things. Here’s a list of Tennessee exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Tennessee. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median Tennessee income for a one-person household is just under $38,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of agencies approved to provide this course in Tennessee.
Getting Help From a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Tennessee bankruptcy lawyer.