| Feature | Chapter 7 | Chapter 13 | Chapter 11 |
|---|---|---|---|
| Common name | Liquidation | Wage earner's plan | Reorganization |
| Who can file | Individuals, couples & businesses | Individuals & sole proprietors with regular income | Individuals & businesses |
| Income test | Chapter 7 means test rules apply to applicable individual debtors | No Chapter 7-style eligibility means test; income affects plan terms | No Chapter 7-style eligibility means test |
| Debt limits | None | $526,700 unsecured; $1,580,125 secured | None for standard Chapter 11; Subchapter V currently $3,424,000, subject to eligibility rules |
| Court filing fee | $338 | $313 | $1,738 |
| Other costs | Trustee administration costs may apply | Trustee fee of up to 10% of plan payments | Quarterly U.S. Trustee fees generally apply in standard cases; not in Subchapter V |
| Length | Often about 3 to 4 months, but timing varies | Generally 3 years for below-median debtors and 5 years for above-median debtors, subject to statutory exceptions | Months to several years; nonconsensual Subchapter V plans generally use a 3- to 5-year payment period |
| Your property | Trustee may liquidate nonexempt property | You generally retain property, subject to plan and Code requirements | Debtor generally remains in possession and operating, subject to court orders |
| Missed mortgage or car payments | Chapter 7 does not provide a repayment plan to cure arrears | Eligible arrears can generally be cured through the plan | Treatment depends on the debt, collateral, and plan terms |
| Co-signers | Generally remain liable on shared debts | A limited co-debtor stay can protect individuals liable on qualifying consumer debts | Generally remain liable unless separately protected |
| Discharge | Individuals only; businesses receive none | After the final plan payment | Businesses at confirmation; individuals after plan payments |
| Credit report | Up to 10 years | Usually 7 years | Up to 10 years |
Chapter 7 bankruptcy can discharge many qualifying unsecured debts, often within several months. A court-appointed trustee reviews the estate and may sell nonexempt property, subject to the Bankruptcy Code and the economics of a sale. Tennessee exemptions include a $35,000 individual homestead exemption in qualifying circumstances and a $10,000 aggregate personal-property exemption, but the applicable exemptions depend on the debtor and property.
For an individual Chapter 7 debtor subject to the means-test provisions, the test starts by comparing average monthly income over the applicable six-month period with the Tennessee median: $63,979 for 1 person, $82,846 for 2, $97,511 for 3, and $109,585 for 4, for cases filed on or after July 15, 2026. Being above the median does not automatically disqualify someone from Chapter 7; additional calculations determine whether a presumption of abuse arises. A debtor also generally cannot receive a Chapter 7 discharge if the debtor received a Chapter 7 or Chapter 11 discharge in a case commenced within the preceding 8 years.
To qualify, you need regular income and noncontingent, liquidated unsecured debts below $526,700 and secured debts below $1,580,125 (11 U.S.C. § 109(e)), based on the current adjusted limits. Section 1308 also generally requires applicable federal, state, and local tax returns for taxable periods ending during the four-year period before filing to be filed by the time required by the statute.
Chapter 11 bankruptcy lets a business, or an individual with debts above the Chapter 13 limits, keep operating while it restructures under a court-confirmed plan. The owner stays in control as “debtor in possession” unless the court appoints a trustee for cause. The filing fee is $1,738.
Chapter 11 has two tracks, with Subchapter V eligibility set by 11 U.S.C. § 1182:
| Feature | Standard Chapter 11 | Subchapter V |
|---|---|---|
| Debt limit | None | $3,424,000, with at least 50% from business activity |
| Who proposes the plan | Debtor first, during a 120-day exclusive period; then creditors | Only the debtor, within 90 days of filing |
| Disclosure statement | Required | Not required unless the court orders one |
| Creditors' committee | Usually appointed | Not appointed unless the court orders one |
| Plan approval | Needs creditor class votes | Court can confirm without votes if the plan pays projected disposable income for 3 to 5 years |
| Trustee | None unless the court finds cause | A Subchapter V trustee oversees the plan |
| Quarterly U.S. Trustee fees | Yes | No |
See small business bankruptcy for how Subchapter V works for owner-operated companies.
Congress passed the Bankruptcy Threshold Adjustment Act (H.R. 7730) in September 2026. The Senate passed H.R. 7730 without amendment on September 28, 2026, and as of October 1, 2026, the measure was awaiting the President’s signature. Until enactment, the current limits remain in effect. If enacted, it would:
The bill’s text applies the new limits only to cases filed on or after the date it becomes law.
| Your situation | Usual fit |
|---|---|
| Income under the Tennessee median, mostly credit card and medical debt | Chapter 7, if otherwise eligible and no presumption of abuse applies |
| Behind on the mortgage and want to keep the home | Chapter 13 |
| Home equity not fully protected by Tennessee exemptions | Chapter 13 may be relevant, depending on the full case |
| Income above the median with money left after allowable expenses | Chapter 13 may be relevant, depending on the means test and debt profile |
| A co-signer on a qualifying consumer debt you want to protect | Chapter 13 may provide a co-debtor stay |
| Prior Chapter 7 or Chapter 11 discharge within the preceding 8 years | Chapter 13 may be relevant, subject to other eligibility rules |
| Business closing for good | Chapter 7 |
| Business staying open with qualifying debt under $3,424,000 | Chapter 11, Subchapter V, if all Subchapter V eligibility requirements are met |
| Individual debts above the Chapter 13 limits | Chapter 11 |
| Family farmer or fisherman | Chapter 12, with a $278 filing fee |
For state-specific rules on exemptions, courts, and filing steps, read declaring bankruptcy in Tennessee.
| Conversion | Rule | Court fee |
|---|---|---|
| Chapter 7 to Chapter 13 | Generally permitted once if you qualify, subject to statutory and case-law limits | None |
| Chapter 13 to Chapter 7 | Allowed at any time if you qualify for Chapter 7 | $25 |
| Chapter 7 to Chapter 11 | Allowed on request | $922 |
| Chapter 13 to Chapter 11 | Allowed on request | $932 |
The Pope Firm files Chapter 7, Chapter 11, and Chapter 13 cases and lists offices in Johnson City, Kingsport, and Elizabethton. Attorney Charles Parks Pope (Tennessee Bar No. 015617) has been licensed in Tennessee since 1992 and has 30+ years of experience in bankruptcy and business restructuring. His background includes business and financial matters relevant to cases involving businesses, rental property, or secured debt.
Your consultation for choosing a bankruptcy chapter covers:
The Pope Firm reviews your income, property, and debts in a free consultation, recommends the chapter that best protects you, and then prepares and files your case through to discharge. Schedule a consultation, or start your case through our online bankruptcy filing service, before a foreclosure sale, repossession, or garnishment moves forward.
The firm also provides wage garnishment help and business bankruptcy options. Call 423-929-7673, visit 404 E. Watauga Ave., Johnson City, TN 37601, or email admin@thepopefirm.com.
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