Filing bankruptcy in Tennessee is tougher now than it was in the past. When federal bankruptcy laws in TN were revised in 2005, the new terms made it tougher on debtors in distress. Tennessee bankruptcy law now requires debtors to pass a means test to file for the more lenient Chapter 7 bankruptcy. Filers may not qualify if their current monthly income is greater than the median family income where they live.
Filing bankruptcy in Tennessee is always an option for businesses in dire straits. However, keep in mind these points before deciding to file:
1. Tennessee bankruptcy laws allow for only certain exemptions. Find out what they are beforehand, or you may lose more in the bankruptcy than you expect.
2. Evaluate Tennessee bankruptcy lawyers and decide if the price is worth it for your time and anxiety.
3. Remember that filing bankruptcy in Tennessee isn't the solution for all of your problems. If you plan to keep your business afloat, you will have to pay back some of the debts.
Action Steps
The best contacts and resources to help you get it done
Know specific chapters and Tennessee bankruptcy laws before filing
TN bankruptcy laws allow businesses to file for two different types of bankruptcy. In Chapter 7 bankruptcy, the business assets are liquidated and a trustee will collect and sell property to pay the creditors. This is best for business owners who don't want to keep the business. Chapter 11 bankruptcy helps business restructure their debts. Creditors vote to accept or reject the reorganization plan and debtors have to pay a quarterly fee to the U.S. Trustee.
I recommend: TennesseeBankruptcyLaw.com will walk you through the process of bankruptcy in the state. Before you file, you must see an approved credit counselor. A list of approved counselors in Tennessee can also be found at the
U.S. Trustee's Office website.
Assess the risk before filing bankruptcy in Tennessee
Some of your property may be exempt according to TN bankruptcy law and some may be at risk. For instance, Tennessee bankruptcy exemptions include part of the value of property you occupy and the car you drive to work. It is best to know what you stand to lose before you file. TN bankruptcy lawyers can steer you in the right direction.
I recommend: The Bankruptcy site outlines Tennessee-specific exemptions. The
Tennessee Bankruptcy Court outlines the rules and forms for filing for bankruptcy.
Find a TN bankruptcy attorney
Even if you eventually wish to proceed on your own, many Tennessee bankruptcy lawyers will give a 30-minute free consultation that may offer some advice.
I recommend: The National Association of Consumer Bankruptcy Attorneys (NACBA)'s
Attorney Finder will help you locate attorneys who are well-versed in Tennessee business bankruptcy laws. Also,
BankruptcyLawFirms.com will let you search for an attorney using your Tennessee ZIP code.
Tips & Tactics
Helpful advice for making the most of this Guide
- If you are considering filing bankruptcy in Tennessee, don't pay some creditors and ignore others. Courts call these "preferential payments" and they are against the law.
- Bankruptcy laws in Tennessee vary from federal regulations, so make sure you know the difference when filing.
The official source of Tennessee Bankruptcy Law is
the Tennessee Bankruptcy Law page at Business.com
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