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Factors that affect your Chapter 7 eligibility

Each year, thousands of Tennessee residents make the decision to file for Chapter 7 bankruptcy. Indeed, reports that Tennessee has the highest bankruptcy rate of any state in the nation. Those considering filing for Chapter 7 bankruptcy in Tennessee should be aware that certain circumstances may preclude them from being eligible for a Chapter 7 filing.

If any debts were previously discharged through a bankruptcy proceeding, it may not be possible for the debtor to file for Chapter 7. This applies if the debtor had a previous Chapter 7 filing within the previous eight years, or a previous Chapter 13 filing within the previous six  years. This is to prevent people from declaring bankruptcy and then quickly incurring more debt and filing again.

The court will also take the debtor's income into consideration when deciding if Chapter 7 is appropriate. According to, debtors must complete a means test  to see how their income compares to the state median. If they earn more than the average, they may be required to file for Chapter 13 instead.

In addition, if the court requires that the debtor attend credit counseling but the debtor ignores the court's order or fails to complete the counseling, he or she may be ineligible for Chapter 7. Finally, if someone attempts to defraud the court or their creditors by hiding assets to get out of paying their debts, they will be deemed ineligible to file for Chapter 7. Those considering filing for Chapter 7 bankruptcy in Tennessee should make sure that they meet all of the criteria before moving forward.

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Rothschild & Ausbrooks, PLLC
1222 16th Avenue South, Suite 12
Nashville, TN 37212

Toll Free: 866-656-8909
Phone: 615-866-2265
Fax: 615-242-2003
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