Chapter 13 Bankruptcy in Tennessee
Chapter 13 bankruptcy lets Tennessee debtors keep all their assets by committing to a court-approved repayment plan lasting 3 years (below-median income) or 5 years (above-median income). It is the main tool for stopping a foreclosure and catching up on mortgage arrears.
By Find Local Law Editorial Team · Last reviewed: May 26, 2026
Researched and drafted with AI assistance and verified against primary sources (statutes, Judicial Council forms, and official court websites). This is general information, not legal advice.
Disclaimer: This page is general legal information, not legal advice. Bankruptcy law is complex and fact-specific. Consult a licensed Tennessee bankruptcy attorney before making any decisions about filing.
Who Benefits from Chapter 13
Chapter 13 is the reorganization chapter of the bankruptcy code — instead of liquidating assets, you propose a multi-year repayment plan and keep everything you own. It is particularly well suited for:
- Homeowners facing foreclosure: The automatic stay halts foreclosure immediately, and the plan lets you cure overdue mortgage payments over 3–5 years.
- Filers who do not qualify for Chapter 7 because their income is too high.
- Filers with non-exempt assets they want to keep — valuable vehicles, investment property, or savings above the wildcard limit.
- Filers with recent tax debts or domestic support arrears that must be paid in full but can be spread out over the plan.
The Repayment Plan
The heart of Chapter 13 is the plan you propose to the court. Your plan must:
- Pay all priority debts in full. Priority creditors include the Chapter 13 trustee’s fee, domestic support obligations (child support and alimony arrears), and certain recent income taxes.
- Pay at least the liquidation value of non-exempt assets to unsecured creditors. Unsecured creditors must receive at least what they would have received if you had filed Chapter 7 instead.
- Commit all disposable income to the plan. Disposable income is what remains after allowed living expenses and required debt payments.
The plan runs 3 years if your annualized income is below the Tennessee median for your household size, or 5 years if above. You make monthly payments to the Chapter 13 standing trustee, who distributes them to creditors according to the plan.
Confirming the Plan
After you file the plan, creditors and the trustee have an opportunity to object. The court holds a confirmation hearing — typically within 45 days of the 341 meeting — at which the judge determines whether the plan meets the legal requirements under 11 U.S.C. § 1325. Once confirmed, the plan binds both you and your creditors.
Saving Your Home and Managing Secured Debts
Chapter 13 is the most powerful tool available for saving a home from foreclosure in Tennessee. Because you cure mortgage arrears over the life of the plan while continuing current monthly payments, you can emerge from Chapter 13 current on your mortgage. However, the principal balance of a first mortgage on your primary residence cannot be reduced (crammed down) under 11 U.S.C. § 1322(b)(2).
Car loans and other secured debts on non-residential property can often be crammed down to the collateral’s fair market value, reducing the amount you must repay on an underwater vehicle loan.
The Discharge — and Why It Is Broader Than Chapter 7
After you complete all plan payments, the court issues a discharge. Chapter 13’s discharge is broader than Chapter 7’s in one important respect: it can eliminate certain debts that would survive a Chapter 7 discharge — including some debts incurred through fraud (11 U.S.C. § 523(a)(2)) or willful injury (11 U.S.C. § 523(a)(6)) — provided the affected creditors had notice of the case and an opportunity to object. Domestic support obligations, most student loans, and DUI-related debts remain non-dischargeable in both chapters.
Prior Discharge Waiting Periods
If you previously received a Chapter 7 discharge, you must wait 4 years from that filing date before receiving a Chapter 13 discharge. If you previously received a Chapter 13 discharge, you must wait 2 years before receiving another Chapter 13 discharge.
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Start your free intakeFrequently asked questions
- Can Chapter 13 stop a foreclosure in Tennessee?
- Yes. Filing Chapter 13 triggers the automatic stay, which halts a foreclosure immediately. The plan then allows you to cure the mortgage arrears over 3–5 years while continuing regular payments.
- What is the repayment plan in Chapter 13?
- You propose a plan to pay creditors out of your disposable income over 3 years (if below Tennessee median income) or 5 years (if above median). The plan must pay priority creditors in full and at least the liquidation value of non-exempt assets to unsecured creditors.
- Can I keep my car in Chapter 13?
- Generally yes. Chapter 13 allows you to cram down (reduce the balance of) certain secured debts, including car loans, to the vehicle's fair market value — though primary home mortgages cannot be crammed down under 11 U.S.C. § 1322(b)(2).
Sources
Related guides
- Chapter 7 Bankruptcy in Tennessee Chapter 7 bankruptcy eliminates most unsecured debts through a court-supervised liquidation process. Tennessee filers must pass a means test, use Tennessee's state exemptions to protect property, and typically receive a discharge within 4–6 months of filing.
- Debts That Cannot Be Discharged in Tennessee Bankruptcy Not every debt is wiped out in bankruptcy. Under 11 U.S.C. § 523, certain debts survive a Chapter 7 or Chapter 13 discharge: domestic support obligations, most student loans, recent income taxes, debts incurred by fraud, and debts for DUI injuries, among others.
- How Bankruptcy Works in Tennessee Bankruptcy in Tennessee is a federal court process governed by Title 11 of the U.S. Code, but the exemptions that protect your property come from Tennessee state law. Most individuals file Chapter 7 (4–6 months) or Chapter 13 (3–5 year repayment plan).
- Tennessee Bankruptcy Exemptions Tennessee opted out of the federal bankruptcy exemption scheme, so debtors use Tennessee's own exemptions (T.C.A. Title 26, Chapter 2). Key protections: homestead up to $35,000 ($52,500 jointly), a $10,000 wildcard for any personal property, and essentially unlimited retirement account protection.
- The Automatic Stay in Tennessee Bankruptcy Filing a bankruptcy petition in any Tennessee federal district court immediately triggers the automatic stay under 11 U.S.C. § 362. The stay is a federal injunction that stops virtually all collection activity — phone calls, lawsuits, garnishments, foreclosures — for the duration of the case.