Find Bankruptcy Lawyers Near You in Chattanooga, TN

The typical cost for a bankruptcy lawyer in Chattanooga, Tennessee varies by case complexity and chapter. For a straightforward Chapter 7 case, attorney fees generally fall between $1,200 and $2,500, with the $338 court filing fee added on top. Many lawyers require full payment of fees before filing, though some offer payment plans that allow you to pay over several months. For Chapter 13 cases, attorney fees range from $3,000 to $5,000, and these fees are often paid through the court-approved repayment plan over three to five years. Court filing fees for Chapter 13 are $313. Some lawyers offer free initial consultations to discuss your situation and provide a fee estimate.

Additional costs include the mandatory credit counseling course ($10 to $50) and the debtor education course ($10 to $50). For individuals with very low income, Legal Aid of East Tennessee offers pro bono bankruptcy representation. Some lawyers may also charge for document preparation or filing fees for amendments. This information is general and does not constitute legal advice. You should consult with a qualified bankruptcy lawyer in Chattanooga for a personalized fee estimate based on your specific circumstances.

Bankruptcy law in Chattanooga, Tennessee provides individuals and businesses a legal pathway to address overwhelming debt. The three primary chapters available are Chapter 7, Chapter 13, and Chapter 11. Chapter 7, often called liquidation bankruptcy, allows individuals to discharge most unsecured debts such as credit cards, medical bills, and personal loans in exchange for non-exempt assets being sold by a trustee. This chapter is typically best for those with limited income and few assets. Chapter 13, known as reorganization bankruptcy, requires filers to propose a three-to-five-year repayment plan to creditors, allowing them to keep their property while catching up on missed mortgage or car payments. Chapter 13 is suited for individuals with regular income who have non-exempt assets they wish to protect or who are behind on secured debts. Chapter 11 is primarily for businesses or high-income individuals needing more complex restructuring, though it is less common for consumer filers in Chattanooga. Choosing the right chapter depends on your income, asset value, debt type, and financial goals, which a local bankruptcy lawyer can help evaluate.

Tennessee law allows filers to choose between state exemptions and federal exemptions when protecting property in bankruptcy, but only if the filer has lived in Tennessee for at least two years. Tennessee state exemptions are generally more generous for certain assets. The Tennessee homestead exemption allows you to protect up to $5,000 of equity in your primary residence, or up to $25,000 if you are age 62 or older, or if you are disabled. For married couples filing jointly, these amounts double to $10,000 and $50,000 respectively. The vehicle exemption in Tennessee is $3,750 for one motor vehicle. Tennessee also offers a wildcard exemption of up to $1,000 for any personal property, plus up to $4,000 of unused homestead exemption. Other state-specific exemptions include $7,500 for household furnishings and clothing, $1,000 for jewelry, and $10,000 for tools of the trade. These exemptions are codified in Tennessee Code Annotated Title 26, Chapter 2. If you have lived in Tennessee for less than two years, you must use the federal exemptions, which include a $27,900 homestead exemption and a $1,475 wildcard exemption plus up to $13,950 of unused homestead.

The means test is a critical calculation that determines eligibility for Chapter 7 bankruptcy in Chattanooga. For cases filed after April 1, 2024, the median income for a one-person household in Tennessee is approximately $55,000, for a two-person household $65,000, for a three-person household $75,000, and for a four-person household $85,000. These figures are adjusted periodically by the U.S. Trustee Program. If your household income is below the median for your family size, you automatically pass the means test and qualify for Chapter 7. If your income exceeds the median, you must complete a detailed calculation of your disposable income over the past six months, subtracting allowed living expenses based on IRS national and local standards. If your disposable income is less than $8,175 over five years, you may still qualify for Chapter 7. If it exceeds $13,650 over five years, you are presumed to have enough income to repay creditors and must file Chapter 13 instead. The means test is a complex form that requires careful documentation of income, expenses, and household size, making professional legal guidance essential.

When you file for bankruptcy in Chattanooga, the automatic stay goes into effect immediately under 11 U.S.C. Section 362. This court order stops all collection activities, including phone calls from creditors, wage garnishments, foreclosure proceedings, repossession efforts, utility shut-offs, and lawsuits. The stay remains in place throughout the bankruptcy case, typically lasting three to six months for Chapter 7 and three to five years for Chapter 13. From filing to discharge, a Chapter 7 case usually takes about 90 to 120 days. Chapter 13 cases last the full length of the repayment plan. Before filing, you must complete an approved credit counseling course from a U.S. Trustee-approved agency, which typically costs $10 to $50 and can be done online or by phone. After filing but before receiving your discharge, you must complete a debtor education course, also called a financial management course, which costs $10 to $50. Failure to complete both courses results in the court denying your discharge.

The costs of filing bankruptcy in Chattanooga include court filing fees and attorney fees. The federal filing fee for Chapter 7 is $338, and for Chapter 13 it is $313, as of 2024. These fees can be paid in installments with court approval. Attorney fees in Chattanooga typically range from $1,200 to $2,500 for a straightforward Chapter 7 case, and from $3,000 to $5,000 for a Chapter 13 case. Many bankruptcy lawyers offer payment plans, allowing you to pay the full fee before filing or in installments during the case. Some lawyers require full payment before filing for Chapter 7, while Chapter 13 fees are often paid through the repayment plan. For those with very low income, pro bono resources are available through Legal Aid of East Tennessee, which provides free legal assistance for qualifying individuals. The United States Bankruptcy Court for the Eastern District of Tennessee, Chattanooga Division, also maintains a list of approved credit counseling agencies and debtor education providers.

Life after bankruptcy in Chattanooga involves rebuilding your financial standing. A Chapter 7 discharge remains on your credit report for 10 years from the filing date, while a Chapter 13 discharge stays for 7 years. Despite this, many individuals see their credit scores improve within one to two years after discharge because old debts are eliminated and their debt-to-income ratio improves. Rebuilding credit strategies include obtaining a secured credit card, becoming an authorized user on a responsible person's account, and making all payments on time for any remaining debts like car loans or mortgages. Certain debts are not dischargeable in bankruptcy, including most student loans unless you can prove undue hardship in an adversary proceeding, recent income taxes (less than three years old), child support, alimony, and debts from fraud or willful injury. Debts for personal injury caused by driving under the influence are also non-dischargeable. A bankruptcy lawyer can help you understand which debts will survive and how to plan for them.