Many people in Tennessee are eligible for Chapter 7 bankruptcy if they’d like to use it, but there are a few things that could make you or your debt ineligible. It’s important to note what these things are so that you know if you can file or not.
First, you would be ineligible if you already used Chapter 7 bankruptcy in the last eight years. This is to keep people from racking up debt and then declaring bankruptcy over and over again.
If you used Chapter 13 bankruptcy in the past, you may also be ineligible. The timeline for this is a bit stricter, though, as you can’t have used it in the previous six years.
You could also be ineligible if the court deems that Chapter 13 would be a better route for you to take. If you have enough income, you may need to reorganize and pay the debt off, rather than using liquidation bankruptcy.
Furthermore, if you are convicted of fraud during the process, you will be ineligible. Fraud could include hiding assets so it looks like you can’t pay the debt off when you actually have enough capital.
Finally, if you are told you need to go to credit counseling and you don’t go, you could be ineligible because you ignored the court order. You must work with the court if you are going to take advantage of this tactic to eliminate debt.
As you consider bankruptcy, look over all aspects of the process very carefully so that you know if it is going to work for you.
Source: FIndLaw, “Chapter 7 Bankruptcy Rules Overview,” accessed June 26, 2015