Bankruptcy Frequently Asked Questions

Presented by Franklin Bankruptcy Attorneys

Who is allowed to file a Chapter 7 bankruptcy?

Any person who resides in, does business in, or has property in the United States is permitted to file a Chapter 7 bankruptcy. The only exception is a person who has intentionally dismissed a prior bankruptcy case within the last 180 days.

How do I know if I am eligible for a Chapter 7 bankruptcy?

The process that determines your eligibility is called means testing. This test weeds out all those except individuals who truly can't repay their debts. Under means testing, if your income is below the median income for families in Tennessee, you will be eligible.

How is means testing done?

When you file a Chapter 7 bankruptcy, you must file a document called Statement of Current Monthly Income and Means Test Calculation. This shows your currently monthly income and the current monthly expenses that you are allowed to claim. You may also be questioned about your expenses and income at the meeting of the creditors which follows after your filing. From these sources, your monthly disposable income is calculated. This figure is used to determine the amount of monthly payment you can afford to make to creditors. That amount must not exceed a certain figure or you will be disqualified and the case dismissed or converted to a Chapter 13 procedure. Talk to a Williamson County bankruptcy lawyer at our firm to discuss your eligibility situation.

Can a married couple file a joint Chapter 7 bankruptcy?

Yes, they can. If a joint Chapter 7 case is filed, one set of bankruptcy forms will be needed and one filing fee charged. In order to accomplish this, both husband and wife must complete the mandatory credit counseling before the case is filed and both must complete the financial management course after the case is filed.

How will filing bankruptcy affect my credit?

Your credit score will take a hit and your Chapter 7 bankruptcy will remain on your credit report for 10 years. However, your credit score probably already took a beating if, prior to bankruptcy, you missed making payments or defaulted on credit obligations. After declaring bankruptcy, you can rebuild your credit with secured credit cards from financial institutions who solicit business from individuals who have filed bankruptcy.