Filing Bankruptcy in Texas

How to File for Bankruptcy in Texas

When the bills and outstanding debts start to pile up and become overwhelming, it can be challenging to get back on your feet. If you find yourself unable to pay your bills and are getting behind on debt payments, bankruptcy could be the solution. Filing bankruptcy can give you the fresh financial start that you need. If you are considering filing for bankruptcy in Texas, here’s everything you should know.

How Does Filing for Bankruptcy Work in Texas?

If bankruptcy may be a good option for your situation, you’ll want to know just how it works, and what steps you should take. Here’s what the bankruptcy process looks like in Texas:

Before You File for Bankruptcy

Before jumping straight into the bankruptcy process, it’s an excellent plan to take stock of your finances. Review all aspects of your financial situation carefully to be sure that bankruptcy is the best option for you. Go over your current bills and debts in detail. Would it be possible to regain control of your finances and catch up—or do things seem to be spinning out of control? Do you have collections notices, judgments, lawsuits, or liens?

If it just doesn’t seem possible to catch up on your own, bankruptcy is likely your best option to restore control over your financial life. Your first step should be to meet with a qualified Texas bankruptcy attorney who has the experience to handle your case and will treat you with the respect and dignity you deserve. In the Dallas-Fort Worth metro area, the Law Offices of Bill F. Payne, P.C., can help you find your pathway out of debt. We have decades of experience working with both personal and business clients.

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The Means Test

During your initial bankruptcy process, you’ll need to complete the means test, which will determine whether you qualify for Chapter 7 bankruptcy or will need to file for Chapter 13 bankruptcy. In Chapter 7 bankruptcy, you are relieved of certain debts but may have to give up non-exempt assets. If you file for Chapter 13 bankruptcy, you will make payments over three to five years to settle your outstanding debts with creditors.

The means test is designed to evaluate your financial situation; it has been in use as part of the bankruptcy process since 2005. The test takes into account your expenses and income for the six months before filing and can be incredibly difficult and complex to navigate on your own. And if you complete it incorrectly, even small mistakes can lead to denial of your petition or other consequences like criminal charges. To get through the complicated means test successfully, you’ll want an experienced attorney on your side. The staff at the Law Offices of Bill F. Payne, P.C., has years of experience working with the means test and can guide you through the process to ensure a successful outcome.

Foreclosure Cases

Your home is your most valuable asset, and if you’re receiving foreclosure notices, you need to act immediately to protect it. If you fail to take care of foreclosure in time, you risk losing your home, as well as being sued for any differences in the sale price. A Chapter 13 bankruptcy can halt a foreclosure and get you on a repayment plan to catch up with your mortgage and save your home. Don’t delay in seeking the assistance of a qualified attorney.

Credit Counseling

During the bankruptcy process, you will be required to go through credit counseling with an accredited and approved agency. You will also need to complete a course in financial management after the filing is complete. These courses are generally easy and convenient—you can even do them online! Our staff will help you find an approved course that’s best for you.

File Your Bankruptcy Petition

In a bankruptcy petition, your finances will be thoroughly and accurately laid out for the courts, including your income, expenses, debts, and assets. Honesty and accuracy are essential in your petition, and a qualified bankruptcy attorney will complete the petition for you, ensuring everything is filed correctly.

Creditors’ Meeting

After filing the initial petition, a creditors’ meeting will be scheduled for a few weeks out. You will attend this meeting, and your creditors have a right to attend and ask you questions as well. However, creditors usually do not participate in these meetings, and they are typically brief and just a formality for you to meet with the trustee.

The trustee will need to confirm your identity and may ask you some simple questions regarding your filed documents. Your attorney will help you prepare for these questions and can guide you through the short meeting.

Discharge of Debts

Through bankruptcy, you may be eligible for a discharge of some or all your debts, if you’ve submitted all your paperwork correctly, attended your creditors’ meeting, and completed your credit counseling sessions. When your debts are discharged, you are free from any legal liabilities on your debts, and you won’t need to pay them. In a Chapter 7 bankruptcy case, the discharge usually is complete within a few months of filing. In a Chapter 13 bankruptcy proceeding, the discharge happens after your required repayment plan, generally in three to five years.

Bankruptcy can discharge the following types of debt:

  • Credit cards
  • Medical bills
  • Past-due utility bills
  • Payday loans
  • Personal loans
  • Other types of unsecured consumer debts

Rebuild Your Credit After Bankruptcy

After you’ve gone through the whole bankruptcy process, you can begin to rebuild your credit again. Generally, your debt-to-income ratio will drastically decrease after bankruptcy, and over time, your credit score should improve.

Soon after bankruptcy, many clients receive offers for secured credit cards, which can be a great way to start building credit again. Unsecured cards may be offered after showing positive payment history again. Use credit wisely after bankruptcy, and be sure to pay bills off on time to avoid getting into another sticky situation with debts. Your credit score and ability to obtain new credit should vastly improve after 12 to 18 months.

Am I Eligible to File for Chapter 7 Bankruptcy?

If most of your troublesome debts are the unsecured type, usually Chapter 7 is right for you and offers the best form of debt relief. The means test will ultimately determine your eligibility, and an experienced bankruptcy attorney can guide you through the process.

To learn more about how we can help put you on the road to financial freedom again, contact the Law Offices of Bill F. Payne, P.C., today to schedule a free consultation.