Chapter 7 bankruptcy is a type of bankruptcy that can wipe out many types of unsecured debts. If you’re far behind on your bills and don’t have the means to afford monthly payments and living expenses, filing Chapter 7 bankruptcy could be the answer for you.
The bankruptcy court will immediately prevent creditors from continuing with collection efforts. The filing will stop foreclosure, phone calls, lawsuits and other harassment by debt collectors. Similarly, Chapter 7 will discharge your unsecured debts such as medical bills and credit card debt.
Texas as well as the United State has enacted legislation that dictates what property debtors can keep through the Chapter 7 bankruptcy. After a discharge, your debt is eliminated. You will keep all exempt assets.
Although Texas law allows residents to choose the federal bankruptcy exemptions, Texas bankruptcy exemptions are very generous. For example, the Texas homestead exemption allows debtors to protect an unlimited amount of value in their home, subject to certain acres requirements, 10 acres urban or 100 acres rural. However, you must have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $146,450.
Since the Texas homestead exemption allows for protection greater than $146,450, you must have been living in Texas for 40 months before the law applies. In addition to the residency requirement for utilizing the Texas homestead exemption, bankruptcy law generally requires that the debtor have lived in a state for the last two years before that state’s exemption laws will apply. If you have not resided in Texas that long, you can still apply the smaller federal exemption.
In some cases, you might use federal law, like in cases where you don’t have lots of equity in a home and you want to use as wild card exemption on other items.
As of April 1, 2019, the federal wildcard exemption is $1,325 plus up to $12,575 of any unused portion of the federal homestead exemption. (If you’re married and filing a joint bankruptcy, you can double these amounts.)
If you have questions, make sure to contact us at 281-332-1400.
There are three fees associated with filing for bankruptcy: the filing fee, the attorney’s fee and other expenses. For a Chapter 7 case, The filing fee is $335.00 and the attorney’s fee for Chapter 7 case will be $1850.00. We also collect $100 to cover postage, copies and other miscellaneous expenses.
Fees can be higher depending on other factors. To qualify for the $1850.00 bankruptcy fee, the following must be true:
Payment Plans available. Call to discuss. Fees must be paid in full prior to bankruptcy being filed. You can have a longer payment plan, but it will delay filing of the bankruptcy. Payment in full at initial consultation will qualify you for a 10% discount, resulting in $185 reduction in fees.
This firm only handles Chapter 7 bankruptcies.
If you take a debt counseling class and either have income lower than the median income in Texas or pass the means test, then yes.
Those earning more than the median income in their state must pass the means test in order to qualify for Chapter 7 bankruptcy. As of May 1, 2020, for a single filer in Texas filing bankruptcy their income must be less than $49,996, and for a couple, that number is $65,708. If your income is higher, additional analysis can be done to determine if you are still eligible. By the way, the larger the household, the higher the income can be and you still can maintain eligibility to file a chapter 7 bankruptcy.
We can walk you through the means test and help you determine whether you are eligible to file for Chapter 7. Call us at 281-332-1400 to schedule your appointment.