What You Need to Bring to Your Bankruptcy Consultation in Tennessee?

In many cases, filing for bankruptcy is necessary to move forward with your life and obtain a fresh start. Whether you have all your debts discharged or need a repayment plan, bankruptcy can be the first step toward financial freedom. It’s important to know what you need to bring to your bankruptcy consultation before seeing an attorney.

At Kerney Law Firm, we solely handle bankruptcy and debt negotiation cases. This means we can provide authoritative advice to our clients in a friendly and personalized setting. With over 20 years of experience, you can trust us to help you achieve your financial goals.

What Is Bankruptcy?

Bankruptcy is a legal way for debtors to create a fresh start if they can’t resolve their debts on their own. This is done by either liquidating assets or developing a repayment plan. Generally, filing for bankruptcy is a last resort option to resolve debts.

Bankruptcy Laws in Tennessee

In 2024, there was a significant increase in bankruptcy filings in Middle Tennessee, from 1,045 to 1,244 total bankruptcy filings.  Bankruptcy cases are handled through federal district courts, and specific bankruptcy laws in Tennessee depend on whether the debtor is filing Chapter 7 or Chapter 13 bankruptcy. Differences between the two include:

• Chapter 7 bankruptcy. This involves a bankruptcy trustee liquidating or selling a person’s non-exempt assets, which results in creditors receiving minimal payment. In some cases, a person may keep their property if filing Chapter 7. In other cases, it may result in property loss.
• Chapter 13 bankruptcy. Chapter 13 bankruptcy helps wage-earning individuals create a repayment plan to resolve their debts within 3 to 5 years. The timeframe for which debtors must repay their debts to creditors depends on whether their income falls above or below the state median, which is $71,997. Chapter 13 bankruptcy also allows individuals to keep their property.

When to File for Bankruptcy

It may be difficult to file for bankruptcy, but sometimes it is unavoidable. Your bankruptcy attorney can help you decide, but generally, you may need to file if:

• Your debts become so unmanageable that you cannot realistically pay them within five years.
• Aggressive attempts have been made to collect debts, such as claims against you, asset seizures, or wage garnishments.
• You cannot afford to live or afford necessities because of debt.
• You have overwhelming credit card or hospital bills.

Bankruptcy Pros and Cons

One of the main benefits of filing for bankruptcy is that many forms of debt are eliminated. This includes credit card debt and medical debt. However, some forms of debt cannot be eliminated, like child support and student loans.

It’s important to understand what kind of debt you have before filing to make sure it can actually be eliminated or paid off through bankruptcy.

Consequences of Not Filing for Bankruptcy

Although you are not legally required to file for bankruptcy, you can face serious consequences for avoiding this option. Choosing not to file for bankruptcy may only bring legal, financial, and emotional strife. Specific consequences include:

• Continued legal claims made by debtors in an attempt to collect debts.
• Wage garnishment may leave little room to pay for daily living expenses.
• Banks are placing liens on your property or seizing your property altogether.
• Serious credit damage that prohibits you from making important purchases in the future.
• Creditors continuing to harass you can lead to emotional stress and life disruptions.
• Continued accumulation of debts.

What to Bring to Your Bankruptcy Consultation

After scheduling a bankruptcy consultation, you may want to know what to bring with you. Generally, you need to bring a copy of all your assets and liabilities, net income and future income, monthly expenses, your federal tax return, and interest paid for student loans if applicable.

You will also need copies of identification information, such as a driver’s license and a Social Security card. Finally, you should bring a list of all creditors and the nature of your debts.

These documents will help your lawyer decide if you should file for Chapter 7 or 13 bankruptcy. It is also recommended to create a list of questions to ask your lawyer beforehand to streamline the process.

FAQs

What Should I Expect at a Bankruptcy Consultation?

At your bankruptcy consultation, you should expect your lawyer to assess your financial goals, discuss your current financial situation, review your debts, creditors, and the general nature of your credit situation, and come up with a plan to file for bankruptcy. Generally, this involves deciding whether to file for Chapter 7 or Chapter 13 bankruptcy.

What Do They Ask You at the Bankruptcy Court?

At bankruptcy court, the appointed bankruptcy trustee will ask you questions related to the nature of your debts and will ask for a list of assets that can be used to pay off your debts. The trustee will also ask for identifying information, such as a license and social security number, to ensure you are the person who actually holds the debt.

What Should I Do to Prepare for Bankruptcy?

To prepare for bankruptcy, you should have a clear idea of all your debts, creditors, the amounts you owe, and a possible repayment plan to realistically pay off your debts. Filing a petition for bankruptcy also requires a significant amount of documentation that paints a full picture of your financial situation. This includes assets, liabilities, net income, living expenses, tax statements, and tuition interest if applicable.

How Much Does a Bankruptcy Lawyer Cost?

The cost for a bankruptcy lawyer depends on the lawyer’s experience, the complexity of your case, the nature of your debt situation, and the location of the firm. Many clients, however, find that paying a lawyer to help them file for bankruptcy and achieve a fresh start pales in comparison to the financial troubles they may face by not filing.

Hire a Bankruptcy Lawyer Today

Filing for bankruptcy does not have to be a stressful situation. It can be a fresh start in life. At Kerney Law Firm, our experienced, empathetic, and personalized approach can help you resolve your financial issues. Contact us today to schedule a consultation and learn more about your options.