Areas of Practice » Bankruptcy

Chapter 7 Bankruptcy

There are two different types of personal bankruptcy that can be filed. The following information will briefly describe the Chapter 7 bankruptcy. PLEASE NOTE THAT EACH BANKRUPTCY CASE IS FACT DEPENDENT. IN ORDER TO MAKE A DECISION ON THE BEST WAY FOR YOU TO PROCEED, YOU SHOULD SPEAK WITH AN ATTORNEY.

A Chapter 7 bankruptcy is liquidation, or commonly called a "fresh start.” You might choose to file this if your debts are large, but your income is low or irregular.

The Chapter 7 bankruptcy discharges (gets rid of) unsecured debt like credit cards and open accounts (but not purchases made within 90 days of filing), medical bills and signature loans. These unsecured creditors will receive nothing in the bankruptcy unless it is determined that the bankruptcy is an asset case.

If you are not current on your secured debt (like house, car, furniture, heavy equipment, computer), being behind three or more payments, you must bring your payments current or risk surrendering the property. If you are unable to do this you might consider filing the Chapter 13 bankruptcy.

The Chapter 7 bankruptcy does not discharge back income taxes less than three years old, student loans, fraud, DUI, alimony or child support. (If a lot of back income taxes are involved, you may choose to file a Chapter 13 bankruptcy.)

The Chapter 7 bankruptcy does not stop criminal charges related to fraudulently written bad checks.

Approximately one month after filing you must attend a Meeting of Creditors.

The Chapter 7 bankruptcy takes approximately five to six months to complete.

The Chapter 7 bankruptcy will be on your credit record for ten years from the date of filing.

You cannot re-file another Chapter 7 bankruptcy for at least eight years after the date of discharge.

Please note that whether you file a Chapter 7 or a Chapter 13 Bankruptcy, you will need to complete a Credit Briefing and Debtor Education Class.  Information is provided at the time of your appointment to complete this requirement.

IF YOU LIVE IN THE MEMPHIS, TENN. AREA AND WOULD LIKE TO HAVE A FREE CONSULTATION TO DISCUSS A CHAPTER 7 BANKRUPTCY, PLEASE CALL OUR OFFICE AT 901-386-1647 TO SCHEDULE AN APPOINTMENT AND FIND OUT THE COSTS TO FILE. YOU WILL NEED TO BRING THE FOLLOWING INFORMATION WITH YOU TO THE CONSULTATION:

  • A list of all creditors with complete addresses, balances and account numbers
  • Your gross and net monthly income, including the last six months of check stubs
  • Your income for the last three years including the last filed tax return
  • A list of your monthly living expenses
  • For secured debt (like house or car), you will need to find out your payoff (without interest) and the interest rate on your loan
  • If you have been divorced within the past year, bring a copy of your Marital Dissolution Agreement.
  • Prior addresses for last three years
  • Prior bankruptcies with case numbers filed in last eight years
  • Leases with full names and addresses


PLEASE NOTE THAT YOU MUST DISCLOSE ALL CREDITORS ON YOUR BANKRUPTCY. YOU CANNOT BE SELECTIVE.

Chapter 13 Bankruptcy

(THE WAGE EARNER)

There are two different types of personal bankruptcy that can be filed. The following information will briefly describe the Chapter 13 bankruptcy. PLEASE NOTE THAT EACH BANKRUPTCY CASE IS FACT DEPENDENT. IN ORDER TO MAKE A DECISION ON THE BEST WAY FOR YOU TO PROCEED, YOU SHOULD SPEAK WITH AN ATTORNEY.

The Chapter 13 bankruptcy, often called the Wage Earner bankruptcy, is a way to reorganize your debt so that you are able to partially or fully repay your debt. The Chapter 13 bankruptcy is not for you if your income is too low or irregular, or if your debts are too high.

Approximately one month after filing you must attend a Meeting of Creditors. You will be assigned a court appointed trustee. You will make payments through a payroll deduction, or at times direct pay, to this trustee who in turn will pay your creditors according to your plan. The secured creditors get paid first, and then the unsecured creditors will get paid a percentage that is determined by the trustee. The Chapter 13 bankruptcy usually takes approximately five years to complete.

A Chapter 13 bankruptcy can be filed to pay off back taxes and stop additional interest on the debt.

The Chapter 13 bankruptcy will stop the foreclosure of a house or the repossession of a car by placing an "automatic stay" on the creditor. The creditor will be unable to garnish your wages, empty your bank account, or cut off your utilities.  Please remember that the bankruptcy law has changed.  If you have filed one prior Chapter 13 Bankruptcy in the last 12 months the automatic stay provides protection only for 30 days unless extended by the court.  There is no automatic stay for 2 or more Chapter 13 Bankruptcies filed in a 12 month period until the court grants one by emergency request.

If you have been evicted or a landlord has received a judgment against you prior to filing the Chapter 13 bankruptcy, the bankruptcy will not stop the eviction.

The Chapter 13 bankruptcy will not get rid of back taxes less than three years old, fraud, DUI, alimony and child support. Student Loans are non-dischargeable. These must all be paid in full in a Chapter 13 bankruptcy.
The Chapter 13 bankruptcy requires discipline because you will be living under a strict budget during the course of the plan. Your trustee must approve any major purchase, such as a house or car.

The Chapter 13 bankruptcy will be on your credit report for ten years from the date of filing.

IF YOU LIVE IN THE MEMPHIS, TENN. AREA AND WOULD LIKE TO HAVE A FREE CONSULTATION TO DISCUSS A CHAPTER 13 BANKRUPTCY, PLEASE CALL OUR OFFICE AT 901-386-1647 TO SCHEDULE AN APPOINTMENT AND FIND OUT THE COSTS TO FILE. YOU WILL NEED TO BRING THE FOLLOWING INFORMATION WITH YOU TO THE CONSULTATION:

  • A list of all creditors with complete addresses, balances and account numbers
  • Your gross and net monthly income, including the last six months of check stubs
  • Your income for the last three years including the last filed tax return
  • A list of your monthly living expenses
  • For secured debt (like house or car) you will need to find out your payoff (without interest) and the interest rate on your loan
  • If you have been divorced within the past year, bring a copy of your Marital Dissolution Agreement.
  • Prior addresses for last three years
  • Prior bankruptcies with case numbers filed in the last eight years
  • Leases with full names and addresses

PLEASE NOTE THAT YOU MUST DISCLOSE ALL CREDITORS ON YOUR BANKRUPTCY. YOU CANNOT BE SELECTIVE.

To contact Fullen & Townsend Attorneys about this area of practice, please send an email to: bankruptcy@tommylfullen.com.

Print Version Print Version       Send to a friend Send to a friend