Bankruptcy

Bankruptcy Attorney Form

"It's always darkest before the dawn"

Knoxville Bankruptcy Attorney

Our attorneys are skilled and experienced in all areas of bankruptcy law. If you find yourself in a position of not being able to repay your debt and are considering filing bankruptcy, we are here to help. We will explain the ins and outs of the law and help you get your financial affairs under control. Its possible to:

Keep Your Home | Keep your Car | Stop Harrassing Calls | Prevent Garnishments

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What is Bankruptcy?

When a person is unable to repay their debts, filing bankruptcy is usually the best option. The principal goal of bankruptcy is affording the business or individual a fresh start and relief from overbearing debt. We share that goal and will utilize our comprehensive understanding of bankruptcy law to afford you the fresh start you deserve.

What Bankruptcy can do for you:

  • Save your house and car
  • Stop lawsuits and collections
  • Eliminate credit card and medical debt
  • Eliminate some tax debt
  • Stop the harassment from creditors
  • Re-establish your credit and get a fresh start

Do you have questions about filing for bankruptcy, but you're not sure where to turn? Call us today (865) 691-7900

Types of Bankruptcy

What is Chapter 7 Bankruptcy?

More and more people are facing devastating debt. Paying off this debt can seem impossible, even to people who have gone through debt reorganization and an extended repayment plan.

Overwhelming medical bills, personal loans, and credit card charges, for instance, plague many people. If you find yourself in this situation or in one similar to it, Chapter 7 bankruptcy, which is also referred to as "Fresh Start" or "Straight" bankruptcy, may be the best option for you. Chapter 7 bankruptcy can eliminate most or all of your debts; at the same time, it will allow you to keep certain assets that do not exceed exemptions.

Chapter 7 bankruptcy also allows you to walk away from a mortgage you can no longer afford, and it can stop a foreclosure in order to give you enough time to find a new place to live. At The Sexton Law Firm, we have experienced and knowledgeable lawyers who can steer you through Chapter 7 bankruptcy. Call us today at (865) 691-7900 to discuss your specific circumstances with one of our bankruptcy attorneys.

Chapter 7 bankruptcy is different from Chapter 13 bankruptcy because there is no reorganization of debt and no payment plan. If you are behind on your mortgage, for instance, you will most likely have to give up your home under Chapter 13.

Chapter 7 bankruptcy is referred to as "liquidation" and involves selling a person's nonexempt property; the proceeds of the sale are then distributed to the person's creditors. This typically results in a person being discharged from paying most of what debt remains. Call us for a free consultation to determine which path is best for you.

Filing For Chapter 7 Bankruptcy

Before you file for Chapter 7 bankruptcy, one of our bankruptcy attorneys will evaluate your assets, debts, and income to ensure that doing so is in your best interest. Once determining that Chapter 7 is right for you, we will move forward with the means test. The Bankruptcy Code requires that every person that files for Chapter 7 must qualify by proving that his or her income is above the state median. Additionally, you must undergo credit counseling with an approved agency.

Filing for Chapter 7 bankruptcy, or debt liquidation, can stop a pending foreclosure for anywhere from a few weeks to a few months. Once you have filed for Chapter 7 bankruptcy, your mortgage company will file a motion for relief from stay with the bankruptcy court. This motion will take about three or four weeks to complete and will lift bankruptcy protection from your mortgage in order for the mortgage company to restart the foreclosure process.

In most instances, this will give you another four to eight weeks to move out of your home and find a new place to live. In other words, while Chapter 7 bankruptcy cannot solve your current mortgage delinquency, it can give you time and opportunity to move forward on your terms.

After we have successfully met all of the requirements for Chapter 7 bankruptcy, we can move forward with your bankruptcy. During this process, a trustee will gather and sell your nonexempt assets. We will work with you to decided which exemptions to claim for your specific situation. Types of exempt assets we can help you keep in whole or at least part include, but are not limited to:

  • Personal effects and clothes
  • Jewelry
  • Household goods such as furniture and appliances
  • Tools of the trade
  • Homestead equity
  • Vehicle equity
  • Retirement plans
  • Insurance polices
  • Workers compensation
  • Personal injury claim income

Once the sale of your nonexempt assets is complete, the proceeds will go toward paying your creditors. Any remaining debts that are eligible are then discharged; there are some debts that cannot be discharged, however. These include alimony and child support and certain taxes, educational loans, personal injury debts, and criminal restitution debts.

Filing for Chapter 7 bankruptcy is a complicated process. In order to navigate the process successfully, it is important to have the experience and skills of our bankruptcy lawyers in your corner. The Sexton Law Firm will maximize the assets you keep and minimize those that are liquidated.

What is Chapter 13?

Chapter 13 bankruptcy is often referred to as a "reorganization" of your debts; it is also called "bill consolidation" or "wage earners bankruptcy." This type of bankruptcy helps those who have more debt than they can repay. Some people think they cannot file for bankruptcy if they are still making an income, but that is not the case. With Chapter 13 bankruptcy, you can continue to earn money while renegotiating the terms of almost all of your debts.

Financial trouble can come to anyone; it affects people in a variety of circumstances and for a number of reasons. If you are among the many people in the country facing foreclosure or repossession, filing for bankruptcy may be the right choice for you.

If you are behind on mortgage payments, property taxes, unpaid taxes, child support payments, car payments, or other secured loan payments, bankruptcy is a way to set your financial affairs in order. For many people, we recommend filing under Chapter 7, if possible, because it allows you to wipe out most debt.

However, depending on your income, Chapter 13 bankruptcy may be your best option. At The Sexton Law Firm, we have experienced and knowledgeable lawyers who can quickly determine which path is best for you and help you navigate bankruptcy. Call us today at (865) 691-7900 for a free consultation to discuss your particular situation with one of our bankruptcy attorneys.

Filing For Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy can be especially effective for people with higher incomes because it helps them pay back only what portion of their debt they can afford. For people dealing with tax debt, Chapter 13 bankruptcy will stop interest from accruing, remove penalties, and even eliminate some tax debt.

As with all types of bankruptcy, a stay is immediately put in place once you file for Chapter 13 bankruptcy. This stay will block any foreclosure or repossession and will also keep the IRS from waging any levies. In fact, Chapter 13 has been known to help people either eliminate completely or significantly reduce "underwater" mortgages. With Chapter 13 bankruptcy, you can work to repay all or at least part of your debt without the incessant calls from debt collectors, and you can do so while still paying for your basic daily living expenses.

Chapter 13 Bankruptcy Plans

When you file for Chapter 13 bankruptcy, you submit a plan to a Chapter 13 Trustee that details the monthly payments you will make over a period of three to five years. These payments will be scaled to match what you can realistically afford. Once the Bankruptcy Court approves your plan, the Trustee will disburse all but about 10 percent of your monthly payments to creditors as outlined in the plan you submitted. The Trustee will then hold onto that 10 percent until your plan is completed. Once you finish your plan, you will receive a discharge of the remainder of your general unsecured debts.

Chapter 13 Bankruptcy Advantages

There are a number of advantages to filing for Chapter 13 bankruptcy, including:
  • Chapter 13 bankruptcy will reduce your payments on secured debts, including car loans.
  • Chapter 13 bankruptcy will allow you to keep your home by providing you with time to catch up on missed mortgage payments.
  • Chapter 13 bankruptcy will allow you time to catch up on child support.
  • Chapter 13 bankruptcy will allow you time to catch up on unpaid taxes.
  • Chapter 13 bankruptcy will enable you to repay portions of your unsecured debts, including credit card debt.

Which debts are and are not dischargeable in bankruptcy vary depending on the chapter and on which taxes are involved. Analyzing this information can be very complicated and confusing. At The Sexton Law Firm, we can help you create a successful plan tailored to your situation. Let us use our skills and experience to help you get back on your feet.

Compare Chapter 7 Vs. 13

Feature
Chapter 7
Chapter 13
Basic operation

Obtain mandatory credit counseling within 180 days before filing bankruptcy petition. File bankruptcy petition with court. Trustee appointed to administer bankruptcy. All non-exempt assets surrendered for liquidation and distribution. Debtor retains only exempt assets. Money from liquidation is split among creditors, according to priority established by the Bankruptcy Code.

Obtain mandatory credit counseling within 180 days prior to bankruptcy. If a debt management plan is proposed, that should be filed as well. File bankruptcy petition and proposed payment plan with court. Payment plan provides payments over a period of three to five years. As a result of new law, more plans will be for five years. Payments are made from disposable income (i.e., whatever is left over after necessities [food, shelter, etc.] have been allowed for), while debtor retains assets.

Limitations

Debtor must pass the "means test" which determines eligibility for Chapter 7. People with incomes higher than state median income will have difficulty being eligible for Chapter 7. Discharge not available if debtor was discharged in Chapter 7 bankruptcy within past eight years.

For debtors owing less that $307,675 in unsecured debt and less than $922,975 in secured debt.

Percentage of consumer filings

71.2% There were 1,1597,462 consumer bankruptcy filings in 2004 and 1,1137,958 were Chapter 7 filings.

There were 449,129 chapter 13 filings in 2004, about 29% of the total. Chapter 13 filings likely to increase in the wake of the 2005 bankruptcy law.

Frequency

Can be used effectively only if not used to completion during previous eight years. New law may make it harder to file Chapter 7 for many people.

Chapter 13 discharge won�t be granted if debtor received discharge in Chapter 7, 11, or 12 four years earlier or more or a previous Chapter 13 discharge two years before.

Effect on debts

With exceptions noted in text (e.g., student loans, support obligations, taxes), most pre-petition debts are discharged (extinguished) upon conclusion of bankruptcy. Liability to creditors ends with courtentered discharge order.

All or a portion of debts paid off over a period of time under a specific plan. With exceptions noted in text (e.g., student loans, support obligations) debts are discharged. Liability to creditors ends when plan is successfully completed and the court enters a discharge order.

Effect on home

In all cases, you must keep up with mortgage payments to preserve your home. If you do, home may be preserved under homestead exemption if there is not substantial non-exempt equity. Marital ownership law may also preserve home. However, new law provides for maximum homestead exemption of $125,000 if home acquired 40 months before filing or if debtor engaged in certain fraudulent conduct

Home will be preserved if plan is successfully completed and if there is not substantial non-exempt equity. If not preserved in this way, home may be preserved under homestead exemption or marital ownership law. However, the new bankruptcy law provides for homestead exemption of no more than $125,000 if home acquired 40 months before filing or if debtor engaged in certain fraudulent conduct.

Effect on car or truck

Vehicle might be taken by creditors (unless necessary for work or arrangements are made to pay off lien by redemption or reaffirmation).

Vehicle will be preserved if plan is successfully completed and appropriate payments made. If not, it might be taken by creditors (unless arrangements are made to pay off lien).

Effect on nonexempt assets

All non-exempt assets must be surrendered for distribution

No effect if plan is successfully completed. If not, nonexempt assets are sold to pay creditors, as in Chapter 7 bankruptcy.

Time to repay

Not applicable

Usually three years, sometimes up to five years.

Payments

Most forms of debt discharged; however other debts, such as taxes, student loans, and child support, will have to be paid.

All "disposable income" is available for payments; that is, whatever remains after necessities (food, shelter, etc.) are taken care of. New law changes Chapter 13 by providing that what is reasonable to pay will be determined in large part by IRS regulations

Portion of debt repaid

Will depend on the value of non-exempt assets surrendered to pay off debts.

May allow for payment of less than the full amount of debts

Result at conclusion of bankruptcy

Bankruptcy court enters a discharge order, ending enforceability of all pre-petition debts that can be discharged in bankruptcy.

Borrower is no longer liable for most debts if plan is successfully completed and discharge is ordered by court

Requirement for bankruptcy proceedings to end

Court must have entered a discharge order.

Borrower must have made all payments in accordance with court-approved plan, after which court enters discharge order.

Effect on credit

Record of bankruptcy remains on credit record for up to ten years from the date of filing.

Record of bankruptcy filing may remain on your credit report for up to ten years from the date of filing, although some creditors will report a Chapter 13 bankruptcy for only seven years.. Creditors may prefer to see this form of bankruptcy, since successful completion of plan may pay more debts than will be paid under a Chapter 7 filing.

How Does it Work?

Contact Us

Give us a call, send us an email, or fill out a contact form. Whatever works for you. But making contact is the first step to regaining your peace of mind.

Free Consultation

We will meet with you at absolutely no cost to discuss your case. We will help you understand the law, the options it allows, and give you an overview of the process.

Make the Filing

Once hired, we will work with you put together your filing and to walk it through the petitioning process. We will be with you every step of the way.

Execute the Plan

You will come out of this process with requirements. that we developed and recieved agreement on. All you have to do is meet them.

Bankruptcy Attorneys

  • clients_feedback

    David Sexton

    David was born and raised in Knoxville and recieved his law degree from the University of Tennessee in 1993.he has also been recognized as a top 100 National Trial Lawyer.

  • Getting Help

    In October 2005, changes in consumer bankruptcy law were instituted. To better understand these new laws, and how they can help you escape overwhelming debt, schedule an appointment with our qualified Knoxville bankruptcy attorneys at the law firm of The Sexton Law Firm, PLLC. A fresh start is only a phone call away, and we now work with clients in Knoxville, Maryville, and Sevierville.

    Please call 865-691-7900 for your free appointment today. You can also fill out our online Quick Contact form

An Affordable Solution

Many people think bankruptcy is too expensive, especially considering the difficult financial position they're already in. But at The Sexton Law Firm, that's not the case. In fact, we make it a point for bankruptcy to be an affordable solution to your financial troubles. Call to see how we can help you at an affordable price.

Protecting Your Valuable Assets

If you're facing bankruptcy, you might be concerned that some of your assets, such as your home and cars, may be seized by creditors to pay off your debts. We're here to make sure that doesn't happen. We can help you save your home, vehicles, and other valuable assets. Remember, the bankruptcy laws are designed to protect you. With us, you can make the law work for you rather than against you

Do you have questions about filing for bankruptcy, but you're not sure where to turn? Call us today (865) 691-7900

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