What Chapter 7 Bankruptcy Means

The most common form of bankruptcy, under Chapter 7 of the U.S. Bankruptcy Code, offers those who are eligible the opportunity to start over with a clean slate and get rid of most debts, including credit card bills, medical bills and past-due utility payments.

The Cost of Chapter 7 Bankruptcy

A Chapter 7 Bankruptcy is $1200 for most consumer clients. This includes the filing fee paid to the court, fee for credit counseling classes as required by law, and fees for our service. When you are self-employed, the costs can be somewhat higher, generally falling in the range of $1500-$2000.

What You’re Allowed to Keep

If you are current on your home or vehicle, it is usually not a problem for you to keep these items. However, you must continue to submit payments. You cannot stop payment for them and expect to keep them.

Process Duration

From the time you file for Chapter 7 bankruptcy to the time of discharge, the entire process will take approximately 6 months.

What Chapter 7 Bankruptcy Won’t Discharge

Child support obligations, alimony, student loans, and criminal restitution are not dischargeable debts. Even if you file for Chapter 7 bankruptcy, you will still be responsible for these obligations.

Chapter 7 Bankruptcy and Personal Property

The laws permit you to keep most personal items. In Tennessee, you may keep $10,000 worth of personal belongings and, if you owe money on your vehicle, only the equity in that vehicle counts against the $10,000. Most financed vehicles have little or no equity. Of course, you must continue to make payments on a financed vehicle if you wish to keep it.

Married Couples and Personal Property

A married couple filing together may generally keep $20,000 in personal belongings. Qualified pensions and retirement accounts set up through your employer and qualified IRAs are protected by law, so if you do not cash them out before filing, you will not lose these funds.

Keeping Your Home

Tennessee state law permits you to keep your home depending on its equity. Persons with minor children and those age 62 or older have greater protections against losing their home. If during your initial consultation we determine that you have too much equity in your home to protect it through Chapter 7 bankruptcy, we will discuss your options for filing for Chapter 13 bankruptcy. Chapter 13 will protect you from losing your home. To learn more about Chapter 13 bankruptcy click here.

During your first meeting with our attorneys we will review in detail your individual situation and discuss your personal and real property. We can then advise you how to best proceed. Remember, our first consultation is free for consumer (i.e. non-business) clients.

Chapter 7 Bankruptcy Trustee

The bankruptcy court will appoint a Chapter 7 trustee who reviews any and all bankruptcy paperwork prepared by our attorneys using the information provided.

Going to Court

Usually you will attend one hearing known as a Meeting of Creditors. This hearing takes place approximately 30 days after filing for Chapter 7 bankruptcy protection. During this time, your Chapter 7 trustee will swear you in and ask you questions. Our office will prepare you for that hearing upon signing your bankruptcy paperwork.


If you are considering filing for Chapter 7 bankruptcy, contact the skilled lawyers at Moore & Brooks Attorneys at Law today at (865) 450-5455.