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Bankruptcy in Tennessee

If you’re from Tennessee, it’s a “rule” that you must love music. Does your taste run toward country singing and the Grand Ole Opry, bluegrass from Appalachia, or rock ‘n roll in Elvis’ beloved Memphis? Regardless, it may pique your interest to know that many famous singers have sought out bankruptcy protection.

Willie Nelson, Tammy Wynette, Merle Haggard, George Jones, and Johnny Paycheck are famous country singers who have filed bankruptcy. But, they are not alone. Elton John, Tom Petty, MC Hammer, Ted Nugent, Jerry Lee Lewis, and Marvin Gaye have filed as well.

Our point? If you are struggling financially and considering bankruptcy, you are not alone. Please read on; we’ll help you get started.

How Tennessee Bankruptcy Law Differs from the Laws of Other States

Tennessee has state specific exemptions, which protect the property you can keep during bankruptcy. Some states allow their residents to choose between federal exemptions and their own state exemptions; Tennessee does not. All residents must use the Tennessee exemptions.

Here are some examples of those exemptions:

  • Some homestead protection.*** For example, an individual can protect $5,000 of home equity and a married couple, filing jointly, can protect $7,500.
  • If you are over 62 years of age, more home equity can be protected ($12,500 for individual filers and $20,000 for married filers, filing jointly. This increases to $25,000, if both spouses are over 62 years of age.)
  • $4,000 of personal property such as a car, furniture, books, jewelry, and clothes.
  • Some insurances and wages are protected.

***A married person, who owns his or her residence as tenants by the entireties with a spouse and who is filing bankruptcy as an individual, may be able to protect the house under tenancy by the entireties laws.

Your Choices in Filing Bankruptcy in Tennessee: Chapter 7 or Chapter 13

If your income is below the Tennessee median income, you likely will file bankruptcy under Chapter 7 because it’s the fastest and easiest way to a clean slate and getting on with your life.

The median income in Tennessee ranges from $37,967 for an individual to $60,909 for a family of four. Add $7,500 for each additional dependent.

If your income is higher than the median, you may still qualify for Chapter 7 because of your expenses and other exceptions, so be sure to consult with a qualified bankruptcy attorney, licensed in Tennessee. This is not a decision for you to make yourself.

Chapter 13 will also get you to a clean slate and get you on with your life, but it takes longer and some of your debts will have to be repaid (albeit under better terms).

How to Find and Select a Bankruptcy Attorney

Here’s a checklist that will help you to choose the best attorney for you:

  • Ask family, friends, or the local bar association for a referral.
  • Enter “Find a Tennessee Bankruptcy Attorney” into Google or your favorite search engine.
  • Look for an attorney licensed in Tennessee.
  • Next, make sure that attorney focuses his or her practice on bankruptcy law.
  • Ask for a no fee consultation so you can get to know the attorney and determine whether you’d like to work together.

How to Prepare to Work with a Bankruptcy Attorney

Here’s a checklist that will help prepare to work with your lawyer:

  • Take a deep breath and know that your efforts will be worthwhile. You deserve a fresh start and you’re well on your way to getting one.
  • Use the Internet to read up on bankruptcy law so you know what questions to ask. Jot down your questions.
  • Gather your financial paperwork.
    • Financial statements
    • Bills
    • Contracts
    • Debts
    • Expenses
    • Garage sale value of your stuff
    • Income
  • Be prepared to disclose everything. There should be no secrets between you and your bankruptcy lawyer.
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