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Chapter 7 Memphis - FAQ's
Q. What property am I allowed to keep in a Memphis Chapter 7 bankruptcy?
A. Memphis uses the Tennessee bankruptcy exemptions. There’s a four thousand dollar wildcard bankruptcy exemption that can be used for any property. Also a variety of specialized bankruptcy exemptions for home equity, tools of your trade, and some household items. An exemption for those over sixty-five as well.
Q. Can I keep my retirement accounts in a Memphis Chapter 7 Bankruptcy?
A. In almost all cases, you are allowed to keep your 401 pensions and individual retirement accounts in a Chapter 7 Bankruptcy. Amounts over a million dollars may be at risk.
Q. Can I keep my house and car in a Chapter 7 bankruptcy?
A. Most individuals have very little equity in their homes and vehicles. For this reason, the answer is usually YES. You must not be behind in your payments. A Chapter 13 bankruptcy will allow you to keep these properties provided you make up back payments over a five year payment plan.
Q. What types of meetings and court dates will I need to attend?
A. Local rules exist for each court. The Memphis bankruptcy court requires you to attend a section 341 meeting of creditors for both Chapter 7 bankruptcy and Chapter 13. In addition, for Chapter 13, you are normally required to attend a confirmation hearing in front of a judge.
Q. What is the “Means Test”?
A. In 2005, in response to the efforts of creditor’s lobbying in Washington, Congress amended the bankruptcy code to prevent individuals with excessive disposable income from filing the Chapter 7 bankruptcy and encouraged use of Chapter 13 which provides for some repayment of your debts. Those individuals over the state median income are disqualified from using Chapter 7 bankruptcy. Currently, the state median income is approximately $37,500 for a single individual with an additional $7,500 per household member. There are some special rules in the bankruptcy code for Chapter 7 bankruptcy concerning business debts.
Q. Can I delay the meeting of Creditors?
A. Unfortunately, the Memphis trustees are very strict concerning continuing the meeting of creditors. You may generally delay one time. Your attorney charges an additional fee unless the request is made at least two weeks in advance. The bankruptcy trustee may dismiss your case if you attempt to continue the proceeding more than one time.
Q. What happens if my case is dismissed?
A. Generally, unless your case was dismissed for lack of good faith, there is very little adverse consequence except you will need to motion to reinstate the automatic stay before thirty days as lapsed. You are also required to pay the bankruptcy filing fee again.
Q. Can I discharge student loans?
A. Generally, the answer to this question is NO. In order to discharge student loans, you must show an extraordinary hardship. Usually this means a long term disability or serious accident. You must also show that a solid effort has been made to repay the loans.