At the request of the Credit Card Industry Lobbyists, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act effective in October 2005.  Since then, if you file a Knoxville bankruptcy when your debts are primarily consumer debts you must go through what is known as the “means test.”  The Means Test is intentionally designed to make it harder for people to file Chapter 7 bankruptcy.

If you are above the “median income” then in many cases you must file a Chapter 13 bankruptcy. However it’s important to know that even if you are above the median income, you may be entitled to specific deductions from your income which may still allow you to file a Chapter 7 bankruptcy.

Because the banks and credit card companies claimed that people were abusing the bankruptcy system by discharging their unsecured debts even though they could make the regular payments Congress passed the requirement of the Means Test.

For folks filing bankruptcy in Knoxville it’s important to know that the Means Test changes a couple of times each year. The Federal Government establishes the new numbers which will be effective November 1.  This year the new numbers will hurt families that are attempting tofile Chapter 7 bankruptcy in Knoxville because in almost every category the “median income” is being lowered.  Remember that is you are above the “median income” when your income is averaged for the last 6 months then you must move on to the second phase of the Means Test to determine if you can file a Chapter 7.

A comparison of the before and after November 1 median income numbers should be helpful.



As you can see, if you are filing bankruptcy in Knoxville it will become harder to file a Chapter 7 case for many families.  This holds true if you live in Maryville, Sevierville, Pigeon Forge, Gatlinburg, Dandridge or Jefferson City.  We help families in all those cities tackle their debt problems by evaluating whether a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy is the best solution.  Often we recommend a Chapter 13 in order to help families save their home from foreclosure.

Obviously, the means test is just one aspect that must be considered in determining whether to file Chapter 7 Bankruptcy.  It’s easy to know and understand your options if you consult with an experienced Knoxville – Sevierville bankruptcy attorney.  We offer a free consultation so that you can know your rights and how to protect your family.

Call Knoxville – Sevierville Bankrutpcy Attorneys Today.

You are one call away for getting advice from a bankruptcy attorney with over 25 years of experience in filing bankruptcies.  Call TODAY at 865-246-1050.

The pain is compounded with the thought of losing home and the social stigma attached to it. However, not everyone loses their home during a business bankruptcy. If you are lying on the verge of bankruptcy and trying to protect your ‘sweet home’ by hook or by crook, you must be relieved to know there are ways to do it. In fact,

laws are in force to protect a certain amount of equity in a home in the event of bankruptcy. However it is best to opt for a debt management or debt consolidation services or a credit card debt consolidation if you have additional arrears on your credit cards, before things get really dicey to save both your home and life from a financial disaster of bankruptcy. Read on to know the following ways to spare your house from business bankruptcy.

Your first and foremost duty is to find the bankruptcy option that will cause less damage to your current financial situation. Both a business and an individual can file a Chapter 7 bankruptcy. A chapter 7 Bankruptcy generally requires complete liquidation of almost all the assets and allows limited exemptions, including the bankrupt’s home. Individuals can qualify for a Chapter 13 as well, which sometimes allows them to keep his secured assets, including his home. However, here the debtors have to make the monthly payments to cover the house note and the arrears spread over a time period agreed upon.

• Provided the filing is solely a business bankruptcy, there are chances to protect your home from being taken away. If the business is a corporation or a limited liability partnership, then the individual or the owner of the stock of the company won’t lose his personal assets, including his home. However, a sole proprietorship will be regarded as an individual bankruptcy, and therefore can put the home at jeopardy.

• You can take a few steps early to keep the home safe. If the business is established on a corporation or a limited liability partnership, then the personal assets of the business owner can remain protected during a business bankruptcy.

• Before the business is formed, if an individual passes on his home to another entity (like his spouse, children), in a trust and still maintain possession of the home, he may not have to lose his home at bankruptcy.

• Last but not the least, you can take advantage of the state and federal exemption laws as well. Under federal law in the event of a Chapter 7, a debtor can keep his home, only if the debtor has less than $20,000 worth of equity in his home, after bearing all expenses to sale the home. In a number of states, the debtor can opt to take the state exemptions, which in many cases exceeds the federal exemption as well.

To conclude, make sure, you consult with legal counsel before try your hands on any business venture, and adopt prior measures to keep your home protected in the event financial fortunes go adversely and bankruptcy is imminent.

If you are considering bankruptcy, contact Knoxville Bankruptcy Attorney Dan Scott

If you have a small business and are wondering where to turn, be sure to seek the advice of an experienced bankruptcy attorney. We help individuals and businesses from Knoxville, Sevierville, Maryville and Jefferson City evaluate the options available during these difficult times.  Call and set up a free consultation with Knoxville Bankruptcy Attorney Dan Scott at 865-246-1050 today.

Photo Credit:  Flickr: MyEye

So what does a bankruptcy discharge mean?

I get both of these questions often, so I’ll explain it in the video below.

If you need more info, just give us a call at 865-246-1050 for a free consultation.

The simple answer is yes.  But you’ve got to know more.

There are basically two types of bankruptcies most individuals file- a Chapter 7 or a Chapter 13.

The Bankruptcy Code requires you to list all your debts (the people you owe) and all your assets.  This will include past due utility and cable bills.  Utility providers include cable television, internet, electric, water, natural gas, and sometimes security monitoring services.  Obviously, eventhough not utility providers, this requirement also requires you to list debts like doctors, hospitals, check cashing companies and even attorneys.

A Chapter 7 bankruptcy (often referred to as a liquidation bankruptcy) is probably the quickest and simplest form of bankruptcy.  The Chapter 7 Trustee is required to liquidate your non-exempt assets to pay creditors.  Understand that the Chapter 7 Trustee has no money to pay claims unless you have non-exempt assets to liquidate.  The Chapter 7 Trustee pays claims in accordance with the priority of claims scheduled in the Bankruptcy Code.

If you owe past utility bills going into your case, the utility provider will be listed in your bankruptcy papers.  Often the utility company may require an increase deposit to continue service. The law permits them to do that.  So as a practical matter, you probably don’t want to owe your current utility providers money when you file your case.

Understand that you are not the first person who filed bankruptcy owing an old utility bill.  These losses are factored into the rates you have paid in the past and will pay in the future.  Also remember that the utility provider will take action to minimize its risk of non-payment in the future.  This may include increasing the amount of your deposit.

There are many things to think about when you are considering filing a bankruptcy.  You will file a Knoxville bankruptcy whether you live in Knoxville, Sevierville, Pigeon Forge, Gatlinburg, Walland, Maryville or some place in between.  Be sure to consult with an experienced bankruptcy attorney as you make this difficult decision.

Contact Knoxville – Sevierville Bankruptcy Attorneys

If you are considering bankruptcy, trust the experienced attorneys at Scott Law Group, PC. We’ve been filing consumer bankruptcy cases since 1983. We offer a free consultation to discuss your situation and to help you explore your options. If you are considering bankruptcy call us TODAY at 865-246-1050.

Photo Credit:  Flickr:  Dustin Coates

Perhaps you’ve received a notice of foreclosure or repossession?  Maybe you have been served with a lawsuit.

More Money Problems

If one or more of these things have happen to you, perhaps its time to consider a Chapter 7 bankruptcy.

As a Knoxville Bankruptcy Attorney, I’m proud to say that the US Congress has declared our firm to be a “Debt Relief Agency.”

Why?  Because we help people file bankruptcy.

After over 25 years filing bankruptcy cases of every kind, we know the challenges you are facing, the embarrassment over the inability to pay your bills, and the stress that’s caused by creditors calling and calling.

When I file your bankruptcy case the court immediately issues an injunction that prohibits creditors from contacting you or taking any action to collect their debt.  That’s a good thing!

So What Is Chapter 7 Bankruptcy?

Although Chapter 7 bankruptcy is often referred to as a liquidation bankruptcy, for most of our clients they LOSE NO PROPERTY IN THE BANKRUPTCY.

That’s a good thing.

In the Chapter 7 bankruptcy all of your unsecured debts (debts for which the creditor did not retain a lien like in a car loan) are discharged.  Certainly, there are specific exceptions for student loans, taxes, child support payments and criminal fines, including traffic tickets.

But for most of our clients they get complete debt relief except for their car and their house.

An experienced bankruptcy lawyer can help evaluate your assets and determine whether you qualify for a Chapter 7 bankruptcy or whether you should consider Chapter 13.    Since you have a personal property exemption of $10,000 (this means two times $10,000 for couples) most of the property you own will not be subject to the claims of creditors.  As a result, most of our clients do not lose any property in their Chapter 7 bankruptcy.

Since the moment you file an automatic injunction issues (called the automatic stay) will be issued.  This effectively stops foreclosure, repossession, creditor lawsuits, creditor harassment and wage garnishment.  That’s a good thing!

About 30 days after you file bankruptcy, you will have a creditors meeting.  This is often referred to as the 341 creditors meeting.

You are required to attend this meeting or your case will be dismissed.  At that meeting the Chapter 7 Trustee wants to know if you have any assets that can be sold to pay your creditors.  (This is where the exemptions come into play.  Most of our clients exempt all of their assets from the Chapter 7 trustee.)  The Chapter 7 trustee also wants to know, “Did you tell the truth?”

Everything you do and say in a bankruptcy case is under penalty of perjury.  So you’ve absolutely got to tell the truth.

About 90 days from your creditors meeting you’ll get a bankruptcy discharge.  This is a bankruptcy court order that says you no longer owe the debt.  That’s a good thing.

If you are considering bankruptcy, contact Knoxville Bankruptcy Attorney Dan Scott

If you have a small business and are wondering where to turn, be sure to seek the advice of an experienced bankruptcy attorney. We help individuals and businesses from Knoxville, Sevierville, Maryville and Jefferson City evaluate the options available during these difficult times.  Call and set up a free consultation with Knoxville Bankruptcy Attorney Dan Scott at 865-246-1050 today.

Photo Credit:  Flickr: espnensorvik

“In a bankruptcy filed for a Jefferson County Truck stop we see evidence of Solyndra Lite,” says Knoxville bankruptcy attorney Dan Scott.  Sure, it’s not $583 Million but it is nearly half a Million Dollars lost!

The bankruptcy filing in the Eastern District of Tennessee was picked up by the Nashville Tennessean which just published a story about the bankruptcy of TR Auto Truck Plaza in Dandridge.  The owner of the Plaza, Mountain Plaza, Inc. was the beneficiary of a $424,000 federal stimulus fund grant.  Perhaps more significantly it appears that the business received the grant AFTER it filed for bankruptcy!  Of course we don’t know whether the owners of this business had the heavy duty connections that the principal investors of Solyndra had.  What we do know is this is just another example the dreams of an entrepreneur dashed by the current economic circumstances.

Who knows what the basis of the grant was.  The state of Tennessee asserted that they simply passed along the grant from the Federal government.  The Federal Government has already proved its ineptness at evaluating such investments:  case in point is Solyndra.

It appears the like many other businesses that file bankruptcy in Knoxville, this company also had tax problems.  The State of Tennessee filed a tax lien in Jefferson County asserting Mountain Plaza, Inc. owed taxes.

As a Knoxville bankruptcy attorney I see more and more businesses struggling to keep their doors open.  In the past when a business ran into financial difficulty, their primary lender would often extend credit to help them get past what was believed to be a temporary setback.  Unfortunately, with the effective takeover of the banks by bank regulators those type loans (as are most) are simply out of the question.

I hope the TR Auto Truck Plaza in Dandridge can work its way out of this financial difficulty.  It may be that the owners have simply been forced to throw in the towel.

If your business is struggling, perhaps you should consider the relief provided by the bankruptcy system.  We file bankruptcy cases for businesses in Knoxville, Sevierville, Jefferson City, and Maryville (and most points in between).

Contact Knoxville Bankruptcy Attorney Dan Scott

If you have a small business and are wondering where to turn, be sure to seek the advice of an experienced bankruptcy attorney. We help individuals and businesses from Knoxville, Sevierville, Maryville and Jefferson City evaluate the options available during these difficult times.  Call and set up a free consultation with Knoxville Bankruptcy Attorney Dan Scott at 865-246-1050 today.

Photo Credit:  Flickr:  Tolka Rover

Note from editor:  Picture not at TR Auto Truck Plaza

Just got your notice of the date for your Chapter 13 Meeting of Creditors?

I got a call from a client yesterday.  She had just gotten her Notice for the Chapter 13 Meeting of Creditors.  She asked, “Should I be worried?”

The short answer to that question is, “NO.”

Since I go to Creditors Meetings every week, that’s pretty easy for me to say.  Allow me to dispel some of the fear of a Chapter 13 Creditors Meeting by explaining what is going to happen.

The Creditors Meeting is required by the bankruptcy code.  If you filed your case in Knoxville (which you will do if you live in Knoxville, Maryville, Pigeon Forge, Seymour, Gatlinburg or Jefferson City) then your meeting is at the Federal Courthouse in Knoxville.  Look for the statute of the Indian out front and you’ll know you are at the right place.

Although all your creditors have a right to be there, it’s not likely that any will show up. Generally the Creditors Meeting lasts less than 15 minutes.  It is a time where the Chapter 13 Trustee asks you questions about the papers you filed with the bankruptcy court and about your Chapter 13 Plan.

So she will just be asking you about the information you gave to your bankruptcy lawyer for use in your papers.  Here’s another good reason to be sure that information you provide is accurate.  Your tax returns have to be provided (through your bankruptcy lawyer) at least 7 days from your Creditors Meeting.  Because of the number of cases on the docket that day the Chapter 13 Trustee does not have time to review new documents at the hearing.   Supplying documents late is a good way to anger the Chapter 13 Trustee and make your case more difficult.

You will be asked to confirm your income and whether you get overtime or other additional pay. Your plan must be based upon reasonably expected (and provable) income.

Additionally, the Chapter 13 Trustee will need to confirm your living expenses.  If your expenses appear way out of the normal, this may cause you a problem.  For some, especially those with a significant number in the household or with substantial medical issues there may be large expense items that need to be (and can be) justified at the hearing.

Understand that the Chapter 13 Trustee is not required to accept what you say as the absolute truth.  However, remember you will be under oath so you’ve got to tell the truth.  What you need to know is that the Trustee can conduct her own investigation of your case, including the value of assets and liens and your income and expenses.

Your best bet is to be forthright and candid. Be sure to speak with your bankruptcy attorney in advance is you have concern about any specific area.

Chapter 13 is a valuable but complicated process.  You should never attempt a Chapter 13 case without an experienced Chapter 13 lawyer.  Many lawyers who file Chapter 7 bankruptcy do not file Chapter 13 bankruptcy because of their complexity.

Contact a Knoxville – Sevierville Bankruptcy Attorney for Chapter 13 Help

If you are considering filing for bankruptcy, contact Knoxville – Sevierville Bankruptcy Attorney Dan Scott by calling 865-246-1050 for a free consultation today. We help people in Knoxville, Maryville, Sevierville, Jefferson City and surrounding areas.  We’ve been filing Chapter 13 bankruptcy cases for over 25 years.

Chapter 13 Bankruptcy Meeting of Creditors

Photo Credit:  Flickr:  TeeGardin

You’ve likely heard of the high profile Chapter 11 bankruptcy case of Myrtle Beach lawyer and real estate developer Harry Pavilack.   He filed his Chapter 11 case as a defensive measure when he was no longer able to service over $70 Million in debt.  In a Chapter 11 case the debtor has an opportunity to propose a Plan of Reoganization to repay its debts over time.

In Pavilack’s case because of numerous questions that arose early in his case the bankruptcy court took the unusual step of appoint a Trustee.  The Trustee was tasked with supervising the case and investigating the potential loss or concealment of assets.  After over $72.5 Million in claims have been filed, the Trustee persuaded the bankruptcy judge to convert Pavilack’s case to a Chapter 7 case.  In arguing that the case should be converted to Chapter 7, the Trustee asserted that Pavilack won’t live long enough to pay his creditors in full.

While a Chapter 11 case allows the debtor to continue to operate its business, a Chapter 7 calls for a liquidation of the debtor’s assets for repayment of creditors.  Often in Chapter 7 cases creditors receive no distribution.  Part of the reason for the lack of distributions to creditors is that often the assets of the debtor are encumbered by liens in excess of the value of the property owned by the debtor.

In Pavilack’s case, much of his holdings are in real estate.  No doubt on liquidation, the many of the assets will not bring sufficient amounts to pay creditors.

So now Pavilack’s case will proceed as a Chapter 7 liquidation. Many of Pavilack’s partners will be called upon to give sworn testimony about what they know about transactions with Pavilack, including the location of his assets.  The Trustee certainly has work to do.

So what happens to Pavilack.  All is not lost.  Pavilack should receive his discharge and be forgiven from the obligation to pay the shortfall.

You may not owe $72.5 Million but still be unable to pay your debts.  Often bankruptcy is the best solution.

Contact a Knoxville -  Sevierville  Bankruptcy Attorney

If you have been harassed by creditors or are considering filing for bankruptcy,  contact Knoxville – Sevierville Bankruptcy Attorney Dan Scott by calling 865-246-1050 for a free consultation today.  We help people in Knoxville, Maryville, Sevierville, Jefferson City and surrounding areas.

Obviously, if you file a Chapter 13 or Chapter 7 bankruptcy it is a matter of “record.” That means basically that the public has a right to access the information.  However, that doesn’t mean that the information is “easily accessible.”  For most people the most they ever find out is that a case is actually filed.

Since the bankruptcy case is a matter of public record sometimes newspapers will publish the names of people who have sought bankruptcy relief.  However with bankruptcy filings skyrocketing its just no longer “news” that someone filed a case.  But remember that this is basically free information that they don’t have to have pay a reporter to generate.  So that has value to the paper.  As a result, it’s unlikely that newspapers will quit publishing the names of people who file.

I have used a special strategy in filing some cases so that very few people ever picked up the case in the newspaper.  Obviously, I can’t disclose that strategy here or it would no longer be “special.”

Remember that the bankruptcy requires that you disclose all your assets and all your debts.  Each creditor listed will be given notice of the filing of your bankruptcy case.  (That’s a good thing because the automatic stay requires them to cease collection activity, including garnishments or lawsuits.)  So you know that anyone you owe money to will know about your case.

If you are involved in a lawsuit, even if you think you will win, the other party will be notified that you filed a bankruptcy case only if they have asserted a claim against you.  If you are the plaintiff (the one bringing the case) and the other side hasn’t sued you, then they may not get notice of the case, but you’ll have to disclose the existence of the case in your bankruptcy papers.

Also, anyone who is jointly liable with you on debt will get notice that you filed a bankruptcy case.  Often these are family members.  You are encouraged to let them know on a personal basis prior to them getting the notice from the court.  Often your landlord will get notice if you have a lease that extends over 30 days.

As mentioned early, the fact that you filed a Chapter 13 or Chapter 7 bankruptcy is a matter of public record.  Anyone who wants to go to the Federal Courthouse in the district in which the case is filed can look at the records (other than your social security number disclosure).  For individuals or entities who have access to a PACER account (an online access to Federal Court records) it’s fairly easy to look up who has filed a case.  In some circumstances, but not always, a service on the web that publishes public data may make the filing available.  It’s my impression that very few people pay to subscribe to these services.

Finally, know that any credit reporting agency will have access to your bankruptcy papers.   The three major credit reporting agencies Equifax, TransUnion and Experian have immediate access to the fact that you filed a bankruptcy case.  That means that anyone who runs a credit report or a background report (such as potential employers) will usually be informed that you filed a Chapter 13 or Chapter 7 bankruptcy.

Contact Knoxville – Sevierville Bankruptcy Attorneys

If you are considering bankruptcy, trust the experienced attorneys at Scott Law Group, PC. We’ve been filing consumer bankruptcy cases since 1983. We offer a free consultation to discuss your situation and to help you explore your options. If you are considering bankruptcy call us TODAY at 865-246-1050.

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Can I file bankruptcy without my spouse?

Well, LIFE HAPPENS!

Your job changes; you get sick; your car is totaled.

So what happens now?

You will need to modify your plan.   So what do you do?

First, contact your attorney.  Let your attorney know that things have changed.  Don’t wait until you are two or three payments behind on your plan.  Contact your bankruptcy attorney when your circumstances change.

You will have to provide your attorney with all of the facts related to your new situation.  This will include updated income statements as well as last year’s tax returns.  (You probably already provided last year’s tax return.)

It may be that your changes are simply temporary. You may need to seek a forgiveness of a portion of the payments or you may need to reformulate your plan completely.

Your bankruptcy attorney should file a Motion to Modify Plan After Confirmation.   In it the changes you need to make, including any forgiveness of back payments, will be included.  The Court will normally set a hearing so that your creditors and the Chapter 13 Trustee can comment and respond to your request.

It is likely that you will have to attend a hearing on the modification of your Chapter 13 Plan.  At the hearing, the judge will approve or deny your Modification It’s very important that you give your lawyer sufficient ammunition to convince the court that it’s in the best interest of your creditors that the Plan should be modified.

If the court approves the Modification, then the Modification will immediately take effect.  F

ive years is a long time.  Circumstances change.  If you have to modify your plan, be sure to contact your attorney early in the process.

Knoxville – Sevierville Bankruptcy Attorney Dan Scott helps with Chapter 13 cases.

If you are considering a Chapter 13 and are wondering where to turn, be sure to seek the advice of an experienced bankruptcy attorney.  We help individuals and businesses from Knoxville, Sevierville, Maryville and Jefferson City evaluate the options available during these difficult times.  Call and set up a free consultation with Knoxville Bankruptcy Attorney Dan Scott at 865-246-1050 today.

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