How To File Bankruptcy in Texas

If you have debts that went out of hand, you have to exhaust all your options to manage each one of them. But if everything fails, filing bankruptcy may be your last and only workable option. It is a long legal procedure, and although filing bankruptcy follows almost the same routine in all the states, you need to know how to go about filing bankruptcy in the state you are living in. This article aims to give you information on how to file bankruptcy if you are living in Texas.

  • Attend credit counseling. The law states that anyone who intends to file bankruptcy must first sign up and sit down in state-approved credit counseling. You have to complete this six-month counseling before you can file bankruptcy.
  • Have a means test. This means test will determine if you are qualified for Chapter 7 bankruptcy. You qualify if your median salary is less than the median salary set by the Texas government. The median salary for single individuals is $36,285; $51,355 for a two-person family; $53,803 for a three-person family; and $61,511 for a four-person family.
  • File Chapter 7 bankruptcy. If you qualify, you can file Chapter 7 bankruptcy, which will help erase your debts, with the exemptions of child support, alimony, and government fines, among other things. Chapter 7 bankruptcy mandates you to sell your properties and pay your creditors with the earnings. This procedure is overseen by a court-appointed trustee. Some of your properties are exempted from Chapter 7 bankruptcy like life insurance; pension; retirement plan; jewelry amounting to $1,350; house; and burial plots. These are all yours to keep.
  • Make a Statement of Financial Affairs. This is a document that lists all your debts: priority, secured, and unsecured debts. It also has a list of all your assets. Remember to list all debts and assets in this document. Otherwise, you won’t be released from the debts you failed to include and you may face legal penalties if you deliberately concealed any of your assets. The Statement of Financial Affairs should be filed in the court.
  • File Chapter 13 bankruptcy. If through the means test you are found to have the capacity to pay off your debts, you will be qualified for Chapter 13 bankruptcy instead of Chapter 7. This orders you to come up with a proposed payment plan to settle your debts completely or in part over a certain period—three or five years. This payment plan is subject to a review and approval. During a meeting, the creditors will also be allowed to object or modify the payment plan. If it is approved, the trustee will collect court-approved amounts from you to be distributed to the creditors. When you complete the plan over the given period, you will receive bankruptcy discharge; meaning all your outstanding debts will be automatically settled.

You can hire a lawyer to help you with the procedure. But if you prefer, you can also go about the procedure on your own. Only make sure to represent yourself well, meet the requirements, and abide by the law in all instances.


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