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Texas Bankruptcy

Texas Bankruptcy


Texas Bankruptcy Law


Texas bankruptcy law reflects federal law and closely reflects the laws of numerous other states throughout the country.  Compared to other states, Texas provides some of the most lenient measures for exemptions, but not everyone is entitled to receive the exemptions.  


Like other states, Texas law requires specific steps from the beginning to the end of Texas bankruptcy.  A resident of Texas must attend a credit counseling course six months before filing, and they must show proof of attending a debtor education course before a settlement is reached.  


Texas Bankruptcy : Personal and Corporate


The two most common types of personal Texas bankruptcy include Chapter 7 and Chapter 13.  The most common form of corporate TX bankruptcy is Chapter 11.  


TX Bankruptcy Chapter 7


This type of bankruptcy works for individuals with an outstanding amount of unsecured debt and low amounts of income.  Often referred to as liquidation or straight, this type of bankruptcy usually supplies someone or families with a clean slate after assets are acquired by a creditor.   


As in most other states, the state of Texas requires a family to pass a means test before qualifying for Chapter 7.  The family’s income must fall below the state average of $48,622, but a judge may still require a family to file Chapter 13 even if their income falls below the state average.  Since the state of Texas is so large, some of the exemptions seem very large compared to other states, but they are nonetheless generous:


• Full value of the home

• Up to 200 acres for family outside of metropolitan area

• 100% of wages in some cases

• Full value of automobile

• Up to $60,000 in personal property minus value of vehicle 


TX Bankruptcy Chapter 11


A corporation facing economic troubles may file for Chapter 11 bankruptcy.  This measure allows the owner to oversee changes within the company, possibly rearrange finances to increase profit, and hopefully decrease the amount of owed debt.  This measure will usually affect the company stock.  


TX Bankruptcy Chapter 13


A family may choose or be forced to file for Chapter 13.  The individual or family makes structured payments over the next three to five years (sometimes longer) in order to reduce and pay off their debt by at least 25%.  The measure will undoubtedly affect a family’s credit, but the measure often allows a family to keep most of their assets and may actually save their credit in the long run.  




A creditor may be able to obtain your state and federal tax returns if you file under Chapter 7.  These wages are usually protected under Chapter 13.  


Filing for Texas Bankruptcy


Within the state of Texas, you are required to file a petition stating specific reasons why you’re filing TX bankruptcy.  You must also provide a list of all your liabilities and assets, and you must schedule appointments with every one of your creditors.  It’s always a good idea to hire a lawyer to help you submit the right documents and fees at the right time.  A lawyer will help you reach the best settlement possible.