Introduction
Filing for bankruptcy can be a daunting process, but understanding the steps involved can help alleviate some of the stress. If you are considering filing for bankruptcy in Texas, it is important to familiarize yourself with the specific laws and regulations that apply in the state. This article will provide an in-depth guide on how to file bankruptcy in Texas, covering the necessary steps and requirements.
Types of Bankruptcy
Chapter 7 Bankruptcy: Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common type of bankruptcy filed by individuals. It involves the liquidation of non-exempt assets to pay off debts. To qualify for Chapter 7 bankruptcy, you must pass the means test, which compares your income to the state median income.
Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals with a steady income to create a repayment plan to pay off their debts over a period of three to five years. This type of bankruptcy is often chosen by those who do not qualify for Chapter 7 or wish to protect their assets.
Pre-Filing Requirements
Before filing for bankruptcy in Texas, there are several pre-filing requirements that must be met:
Credit Counseling: Under the Bankruptcy Abuse Prevention and Consumer Protection Act, individuals filing for bankruptcy must complete a credit counseling course from an approved agency within 180 days before filing.
Means Test: As mentioned earlier, individuals filing for Chapter 7 bankruptcy must pass the means test. This test compares your income to the state median income to determine your eligibility.
Complete Bankruptcy Forms: You will need to gather and complete various bankruptcy forms, including the petition, schedules, and statements. These forms provide detailed information about your financial situation, assets, debts, and income.
Filing for Bankruptcy
Once you have completed the necessary pre-filing requirements, you can proceed with filing for bankruptcy in Texas. The following steps outline the process:
Choose the Correct Bankruptcy Court: Determine which bankruptcy court in Texas has jurisdiction over your case. Texas has four bankruptcy courts located in Houston, Dallas, San Antonio, and Austin.
File the Bankruptcy Petition: Submit the completed bankruptcy forms to the appropriate bankruptcy court. You will need to pay a filing fee, unless you qualify for a fee waiver.
Automatic Stay: Once your bankruptcy petition is filed, an automatic stay goes into effect. This means that creditors must immediately stop all collection efforts, including lawsuits, wage garnishments, and phone calls.
Meeting of Creditors: Approximately 20-40 days after filing, you will attend a meeting of creditors, also known as a 341 meeting. This meeting allows the bankruptcy trustee and creditors to ask you questions about your financial situation.
Conclusion
Filing for bankruptcy in Texas involves several steps and requirements, including completing credit counseling, passing the means test, and gathering the necessary bankruptcy forms. Once these pre-filing requirements are met, you can file the bankruptcy petition, which initiates an automatic stay and leads to a meeting of creditors. It is important to consult with a bankruptcy attorney to ensure that you understand the process and make informed decisions throughout.
References
– United States Courts: www.uscourts.gov
– Texas Bankruptcy Law: www.texasbar.com
– Bankruptcy Abuse Prevention and Consumer Protection Act: www.justice.gov
