When debts are mounting up over your head, and you can’t see your situation improving, it may be time to file bankruptcy.
If you live in Memphis, TN, you should be considering filing for something called Chapter 7 Bankruptcy. This basically allows an individual or couple to get rid of their debts.
And you should consider this type of bankruptcy if you genuinely feel like you are so hopelessly in debt and foresee yourself never being able to pay the money back.
How long does the process take?
Unfortunately, there is no definitive answer to this question. We know that if you seek professional legal help and advice, the process can run much more smoothly, and it can be a lot less stressful.
As an estimate, we would say four to eight months are realistic timeframes to expect for this process.
To get started with the bankruptcy process, there are a number of steps to follow, which will now discuss in this article.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is also often referred to as liquidation bankruptcy and is a way for you to discharge your debts in desperate times.
You hand over a petition to the court stating how hopelessly in debt you are in and your inability to pay back such a large amount of money in the future.
The court will then review your petition and either accept or decline it. There are several factors that the court will look at to make a decision, and so it’s crucial you get the right legal help to ensure you are ticking all the court’s boxes.
Paperwork Needed to File Bankruptcy
It’s important you fill in the correct Chapter 7 paperwork to support your bankruptcy application to the courts.
In the paperwork, you will have to include info about your:
- All your debts
- Recent financial transactions
- Any exempt property
Once you’ve filled in all the relevant info and sent it to the court, they will issue you with an automatic stay. The automatic stay prevents creditors from seizing any of your assets.
Attend a Hearing – 341 Meeting of Creditors
Around 20-30 days later or so after you’ve filed your paperwork, you’ll have to attend a hearing where you’ll meet your bankruptcy trustee. The trustee will ask you several questions, and you’ll be under oath.
The hearing is also known as a 341 Meeting of Creditors. And as the name implies, your creditors will attend and sometimes ask questions.
The meeting is pretty short, with it normally lasting 10-20 minutes in most cases. However, this meeting will help determine if you need to provide any additional documents, which can happen if your creditors have any objections to potentially limited info that you have given them.
You’ll have time after the meeting to provide the additional paperwork—typically 30 days.
Attend Financial Management Courses
As part of the Chapter 7 Bankruptcy process, you will have to attend two financial management courses to be allowed a debt discharge.
You must complete the courses within 60 days after your 341 Meeting of Creditors takes place. If you complete the two courses, you will then be issued a financial certificate.
At this point, the process isn’t finished yet. Your case will be closed once the court is satisfied that any outstanding issues are resolved.
What Makes the Bankruptcy Process Longer?
Four problems usually make the Memphis, TN bankruptcy process go on for longer.
- Not completing financial courses
- The trustee is still selling your property
- Concerns from your creditor
- You’ve provided limited information
It should be at the top of your agenda to ensure that you complete both financial courses within the court’s given timeframe. If you miss the deadline, your bankruptcy will drag on much longer than you ever would want. After all, bankruptcy is a very stressful process.
If you have non-exempt property, then your trustee is assigned the task of selling it off. It will take longer than the standard time expected for bankruptcy to sell that property in some cases. In this situation, you’ll just have to be patient.
As mentioned earlier, any additional paperwork that you’ve been asked to be filed should be done within 30 days. Creditors can then scrutinize the new information you’ve provided, which can then make the bankruptcy process drag on.
Also, creditors can object to a court’s ruling that you will get a debt discharge within 60 days.
Lastly, if you don’t provide all the information required of you in a detailed and precise format, you could be looking at your bankruptcy case lasting a lot longer than you expected.
Who Is Eligible for Bankruptcy?
Basically, any business, person, or couple can file for bankruptcy in Memphis, TN. Yet, there are some criteria that you must meet to apply for a Chapter 7 Bankruptcy.
You mustn’t have filed for bankruptcy in the past seven years to be eligible. You can also expect that you can file for bankruptcy as an individual if you earn less than the median household income in Tennessee.
Other factors that are considered can include your family’s size and if you have any disabilities or other health-related issues.
What if My Income Is Above the State Median?
In this instance, you will have to take is the means test. This test looks at your monthly expenses against your income. If it shows up that your disposable income is quite large, then it will be less likely that you pass the means test.
You may have many more questions about going bankrupt, which you can find easily from reputable Memphis, TN lawyers.
Filing Bankruptcy in Memphis, TN
If everything in the bankruptcy process works smoothly in your favor, you could be looking at just four months for your bankruptcy to come into effect.
However, not all bankruptcy cases run smoothly, so it’s a good idea to ready yourself for a potentially longer processing time than four months. And clearly, it’s in your best interests to seek professional help so that you can feel less stressed and more in the know about your bankruptcy proceedings.
If you’re looking to file bankruptcy in Memphis, TN, and need an attorney, contact our friendly team today.