Knoxville bankruptcy lawyers

Knoxville Bankruptcy Lawyer

Helping individuals and businesses obtain financial relief in Tennessee

You’re not alone. Most bankruptcies occur due to a change in fortunes that people couldn’t control. Many people file for bankruptcy because they can’t pay their bills due to the loss of a job, medical expenses, the difficulty of living separately after a divorce, or credit card debt. Please know that bankruptcy is a valid legal option. In fact, the right to file bankruptcy is set forth in the US Constitution. At LaFevor & Slaughter, we’ll stop the creditors from calling you and sending you letters. Our Knoxville bankruptcy lawyers are ready to help you get a fresh financial start.

How can we help?

How do you help folks choose the right bankruptcy option?

We’ll review your full financial picture. For individuals, this means reviewing your sources of income, all of your debts, and all of your assets. The review will identify each item and place a current value on each item. The analysis for businesses is generally similar but usually more complicated depending on the type of business, the way the business generates income, the assets of the business, and other factors.

How are debts categorized in Knoxville?

Our Knoxville bankruptcy lawyers help clients identify the debts they have. Debts are categorized as follows:

  • Secured debts. These debts are secured by collateral (real or tangible property). If you’re in default on a secured debt, your creditor has the right to take possession of the collateral and sell the collateral to pay off your debt. Common examples include a mortgage which is secured by your home and a car loan which is secured by your car.
  • Unsecured debts. These debts are not secured by collateral. Common examples include medical bills and credit card debts. The creditors cannot directly take possession of any of your assets if you’re in default on your loan. They need to obtain a judgment which then gives the creditors the right to sell off your assets.
  • Priority debts. The US Bankruptcy Court for the Eastern District of Tennessee will not allow debtors to discharge certain types of debts that are given “priority.” Common examples include child support, student loans, and income taxes.
Bankruptcy Lawyers Knoxville TN

How does the “automatic stay” provision stop creditors from calling?

It’s upsetting when you’re in debt. Every time you answer the phone, a creditor may be calling you. Every time the mail is delivered, there may be a letter from a creditor, a creditor’s lawyer, or the local courthouse.

When you file any type of bankruptcy, the court provides an automatic stay. This stay means that every type of collection action must stop immediately. Creditors cannot send you collection letters, file lawsuits, or start foreclosure proceedings. The moment your Chapter 7, 11, or 13 petition is filed, you can breathe. The bankruptcy court will appoint a trustee. All legal actions by any creditor, including secured creditors, must go through the bankruptcy trustee. Unless a creditor obtains relief from the automatic stay, the stay continues until your bankruptcy is discharged or resolved.

When should you file a Chapter 7 bankruptcy in Knoxville?

. Generally, a Chapter 7 bankruptcy is used if:

  • You don’t have any secured debts
  • You don’t have any valuable assets

You can exempt (protect) some of your assets such as furniture, clothing, and other personal possessions) up to certain dollar amounts. You should also be able to exempt some retirement benefits such as Social Security retirement income, certain pensions, VA benefits, and other benefits. Our Knoxville bankruptcy lawyer will explain which assets you can protect and which the trustee can take.

Once your Chapter 7 petition is approved, your unsecured debts (credit cards, medical bills, personal loans, etc.) will be discharged. The creditors will not be able to pursue any further action against you. You may, however, be able to reaffirm (AKA, agree to pay) some secured debts, such as any debt on your vehicle.

Individuals and businesses can file for Chapter 7 bankruptcy.

When should I file a Chapter 13 bankruptcy in Knoxville?

At LaFevor & Slaughter, we often recommend Chapter 13 bankruptcy for homeowners who are in arrears, and for people who have other types of secured debts. We may also recommend Chapter 13 if you fail the Chapter 7 means test.

The basics of Chapter 13 are that you propose a plan where:

  • You agree to pay off the arrears on your secured debts over a three-to-five-year period.
  • You agree to make the future payments on the secured debts as they become due.
  • You agree to pay the arrears on any priority debts over the same three-to-five-year period and continue to pay the future payments on those priority debts.
  • You agree to pay a portion of your unsecured debts during that same three-to-five-year period.

Once the plan is approved, you make regular payments to the trustee.

Once you complete the plan, you can keep your secured property, such as your home. You’ll need to continue to make the future payments as they become due. The balance of your unsecured debts will be discharged.

While you cannot discharge your priority debts, you generally can pay the arrears over the three-to-five year period, provided you make the future payments (child support, taxes, etc.) as they become due.

Individuals can file for Chapter 13 bankruptcy.

The means test

In 2005, the US government began using a means test to determine if you’re eligible to file a Chapter 7. If you pass the means test, you can file a Chapter 7. If you don’t pass, you’ll need to file a Chapter 13. The means test reviews your income and your family size against averages in the Knoxville area. (Some income, like Social Security income, is not counted.) If you income is below the median income, you pass the means test. If it’s not, then you need to look at allowable expenses (essentially, bills and necessities, like food and clothing) vs. disposable income (what’s left over). If your disposable income is low, then you could still file for Chapter 7. If not, then you file for Chapter 13.

Most folks pass the means test.

When should you file a Chapter 11 bankruptcy in Knoxville?

Chapter 11 bankruptcy is sometimes called “reorganization.” It is designed to help businesses stay open while paying off their creditors. It lets you keep some of your assets while creating a plan to pay back creditors – provided, of course, that the creditors agree.

While individuals can file for Chapter 11, it is primarily used by businesses and corporations.

Are there alternatives to bankruptcy in Knoxville?

Our Knoxville bankruptcy lawyers will review whether it is possible for you to avoid bankruptcy. We’ll examine if you can obtain a new loan to consolidate some of your debts. A consolidation may be advisable if your current loans have a high interest rate. Some of your creditors may be willing to reduce the amount of your payments so you can manage your bills. We’ll explore all your options.

Do you have a Knoxville bankruptcy lawyer near me?

LaFevor & Slaughter is located at 900 South Gay Street, Suite 2006, in Knoxville. We maintain an additional office in Maryville.

We also conduct consultation by phone and through video conferences. We’ll answer all your questions and guide you through this stressful time.

Talk with an experienced Knoxville bankruptcy lawyer now

LaFevor & Slaughter helps people get a fresh start. Our Knoxville bankruptcy attorneys have helped many people like you use the bankruptcy process to manage their debts, save their homes, and discharge their unsecured debt. We’ll review whether Chapter 7, Chapter 13, or Chapter 11 is right for you. We’ll also discuss how to restore your credit after bankruptcy. Call us or fill out our contact form to schedule a consultation.