Sat. Jul 13th, 2024

Individuals and businesses can file for bankruptcy under the protection of the bankruptcy court to eliminate or repay their debts. Understanding the basics of bankruptcy is important if you’re considering filing in Texas. Here’s what you need to know.

Types of Bankruptcy

There are several types of bankruptcy, but the two most common types for individuals are Chapter 7 and Chapter 13 bankruptcy.

Chapter 7 bankruptcy: Also known as “liquidation” bankruptcy, Chapter 7 allows you to eliminate most of your unsecured debts, such as credit card debt and medical bills, in exchange for giving up some of your assets. However, certain assets, such as your home and car, may be exempt from liquidation.

Chapter 13 bankruptcy: Chapter 13 is a “reorganization” bankruptcy that allows you to repay your debts over a period of three to five years. During this time, you’ll make monthly payments to a bankruptcy trustee, who will distribute the funds to your creditors.

Qualifying for Bankruptcy

To qualify for bankruptcy in Texas, you’ll need to meet certain eligibility requirements. For Chapter 7 bankruptcy, you’ll need to pass a means test, which looks at your income and expenses to determine whether you have enough disposable income to repay your debts. If you don’t pass the means test, you may be required to file for Chapter 13 bankruptcy instead.

Filing for Bankruptcy

To file for bankruptcy in Texas, you’ll need to complete a bankruptcy petition and other forms and file them with the bankruptcy court. You’ll also need to attend a meeting of creditors, where you’ll be asked questions about your finances by a bankruptcy trustee.

Working with a Bankruptcy Lawyer

Filing for bankruptcy can be a complicated and stressful process, but working with a bankruptcy lawyer can help ensure that everything goes smoothly. A bankruptcy lawyer can help you understand your options, guide you through the process, and represent you in court if necessary.


Bankruptcy can be a difficult decision to make, but it can also provide a fresh start for individuals and businesses struggling with debt. If you’re considering filing for bankruptcy in Texas, it’s important to understand the different types of bankruptcy, eligibility requirements, and the filing process. 

Working with a bankruptcy lawyer can also help ensure that you get the guidance and support you need to make the best decisions for your financial future.

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