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How to File Bankruptcy in Texas


Texas Bankruptcy Process

At first look, you might think that filing bankruptcy in Texas appears as overwhelming as your current credit/debt situation.

REST ASSURED, IT IS NOT AS DIFFICULT AS IT APPEARS AT FIRST LOOK. Here you’ll find a comprehensive overview, but to quickly find out about your own personal options, fill out the form here on the page or see the many choices of bankruptcy attorney offices at the top of this page.

2005 brought the Bankruptcy Act along with Credit Counseling 
In 2005, the 2005 Bankruptcy Act makes it law that each individual person seeking bankruptcy relief who files bankruptcy undergo counseling for credit management within 6 months previous to filing bankruptcy relief. Additionally, debtors are required to complete a financial course in money management course after they bankruptcy.

2005 also brought the Bankruptcy Act Means Test
According to the 2005 Bankruptcy Act a person whose income netted by expenses has to pass a simple test determining whether they qualify for Chapter 7 or whether they’re required to file Chapter 13. Applying the bankruptcy means test, courts analyze 6 months’ average income leading up to filing bankruptcy and compare this average monthly income to the median monthly income for Texas. If a person’s income falls below the monthly median income, the person is allowed to select Chapter 7 which is generally regarded as a more favorable bankruptcy. If, on the other hand, income is more than the monthly earning median, additional portions to the Texas bankruptcy means test are applied to the person’s specific situation in order to determine whether they can apply to file Chapter 7 bankruptcy in Texas or whether they’ll be required to seek Chapter 13 bankruptcy.

Individuals who are not able to pay a minimum of $6,000 spread out over the coming 5 years will also still typically be allowed to file Chapter 7 bankruptcy in Texas. This breaks out to $100 per month in payments made on unsecured debts over the next 5 years. After expenses are factored in, this becomes extremely difficult for many, and hence they’re often able to file chapter 7 even if their income is over the median Texas monthly income. If, on the other hand, a person can pay $10,000 or more over the coming 5 years (totaling at least $166.67/month) Chapter 7 is most likely not an option and will typically be denied.

Those who can afford over $6,000 but not $10,000 over 5 years require their financial situation to be submitted into a mathematical bankruptcy calculation which is used to determine whether Chapter 7 bankruptcy in Texas will be granted or not. For those debtors who could handle payments of at least 25% or more toward their unsecured debt, once again, Chapter 7 Bankruptcy will typically be denied because it is an indication that they could settle their debts through other methods such as settlement offers. Those individuals and families who cannot afford 25% toward unsecured debts are typically granted bankruptcy protection under Chapter 7 successfully. The common types of unsecured debts include credit cards, medical bills, and other outstanding bills and loans. Chapter 13 bankruptcy is still an option for those who qualify for chapter 7, if they specifically want to go that route.

Gathering the Necessary Financial Paperwork

Once again, this part often scares people, but rest assured, our attorneys have people who are trained to help you navigate this portion of the process to make it as painless as possible.

Starting the bankruptcy filing process begins with listing all of your current sources of pay and income; any major transactions you’ve made over the last 2 years; your monthly expenses to live; any debts (whether they’re secured or unsecured); as well as any property (this includes all possessions and assets and is not confined to real estate property). Collect tax returns for the most current two year period, any deeds you hold to real estate, your automobile(s’) title(s), along with any documents pertaining to any debts and loans that are outstanding that you have in your possession.

Filing for Bankruptcy in the State of Texas
After you have assembled this info and paperwork that you can find, whether you’ve collected this by yourself or with help from one of our attorneys or paralegals, our lawyers will help you to figure out which of your property will be exempt from being taken away from you. Texas bankruptcy property protection seizure exemptions. Filing for bankruptcy, you or your lawyer which you can find through legalhelp.org, must file a 2-page bankruptcy petition along with several more forms at your specific jurisdiction’s Texas bankruptcy court. Our attorneys will help guide you through this process and in most cases will handle this portion of the bankruptcy for you including locating and filing in the proper Texas district bankruptcy court. These bankruptcy forms, which are collectively called bankruptcy schedules require you to describe in detail your present financial situation along with recent monetary transactions (usually over the period of the previous 2 years).

The court fees to file a Texas Chapter Seven bankruptcy comes in at $274. This court fee cannot be waived although it is possible to be paid via installments if the judge allows. The $189 fee for Ch. 13 bankruptcy likewise may not be waived.

For further information, click to the next page of Texas Bankruptcy Filing Information.


 

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