Do I Qualify For Chapter 7?

Caring Knoxville Chapter 7 bankruptcy lawyer helps clients seek fresh starts

Residents of Knoxville and the surrounding areas turn to William E. Maddox, Jr. LLC, Attorney at Law for help navigating the Chapter 7 bankruptcy process in Tennessee. Before filing for bankruptcy, it is important to thoroughly assess your finances, explore your options and consider the long-term and short-term consequences of filing. I help my clients determine whether they qualify under the Chapter 7 means test and advise on protecting certain assets through Tennessee’s bankruptcy exemptions. I have helped numerous individuals make fresh financial starts and discharge overwhelming medical and credit card debt.

Experienced Tennessee bankruptcy attorney advises clients on means test

Your application for Chapter 7 bankruptcy can only be considered if you meet certain income qualifications. When you can show that your household income for six months prior to filing for bankruptcy was below the median income in Tennessee for households of comparable size, you may qualify for Chapter 7. If your household income exceeds the median income for households of comparable size, you will need to meet the standards of the Tennessee means test to qualify.

The means test is an assessment of your finances to determine if you can repay your debts through a payment plan rather than discharge your obligations. To prove that you do not have sufficient disposable income to pay off your debts, you will need to submit thorough evidence of your:

• Expenses — Amounts used for food, rent, utilities, medical care and other necessary expenses must be submitted, along with purchases that would be considered unnecessary expenses.
• Income — Pay stubs, bank transfers and other forms of documentation may be used to show the full scope of your income each month. If you make enough income to cover your necessary expenses with disposable income left over, you may earn too much to qualify under the means test.
• Family size — Establish if you have children or other dependents living in your household or who live elsewhere but rely on your financial support.

Typically, you will need to provide evidence from the past two years. Mistakes in the evidence you provide can be costly, resulting in an incorrect decision that you do not qualify for Chapter 7.

Within the six months leading up to the date you file for bankruptcy, you will also need to complete mandatory credit counseling.

To ease the bankruptcy filing process, I help clients prepare the documentation necessary to establish eligibility under the means test.

Knowledgeable bankruptcy lawyer advises clients on Chapter 7 alternatives

After your Chapter 7 application is approved and the automatic stay goes into place, I will offer legal guidance through next steps, including the meeting of creditors and liquidation process. I will also be available to answer pertinent questions about the effect of a new job and compliance with bankruptcy terms.

There are several ways in which a person can be disqualified from filing for Chapter 7. Your application can be denied if you provide false or inadequate information, and your petition will not be accepted if you received a previous Chapter 7 discharge within the past eight years or a Chapter 13 repayment plan within the past six years.

If you are ineligible for Chapter 7 because you do not pass the means test, it may be advisable to wait a few months before filing a new application. Updated evidence of your income and expenses may be sufficient to qualify. Another option is filing for Chapter 13, which would allow you to restructure your debts without liquidating your assets.

Contact a committed Knoxville Chapter 7 bankruptcy attorney for a free consultation

From the Knoxville, Tennessee office of William E. Maddox, Jr. LLC, Attorney at Law, I help individuals determine their eligibility for Chapter 7 and prepare required documentation. To schedule your free consultation, call 865-293-4953 or contact me online.