Understanding Chapter 7 Bankruptcy Exemptions In Texas
Since I practice bankruptcy law in Texas, and 98% of the time I use Texas law to determine my clients exemptions, my comments are going to be directly specifically at Texas and Federal exemptions which I am allowed to use in Texas.
Under Texas and Federal exemptions, it is really hard to lose an asset in a bankruptcy.
The vast majority of the bankruptcies I have filed are no-asset Chapter 7 bankruptcies. That means I was able to exempt every asset the individual had, so they kept all of their property.
To determine if you qualify for a no-asset bankruptcy, you should speak to an experienced Chapter 7 lawyer who can review your individual circumstances.
For your reference, I typically only work on one to two asset cases a year. That should give you some perspective as to how rare asset Chapter 7 bankruptcies are in Waco, Texas where I practice.
Where Is My Local Bankruptcy Court Where Will My Meeting Of Creditors Be Held
Like every other state in the union, Texas contains a series of state and federal courts to serve its residents. Because bankruptcy is a process organized under federal law, Texas bankruptcy courts are part of the federal court system.
Texas is a big state with four federal districts, each with numerous bankruptcy courts. Districts are further divided by division, which include courthouses for local residents. The 341 meeting of creditors usually takes place at the division courthouse nearest to your home. In most cases, bankruptcy filers are not obligated to attend court. The meeting of creditors rarely takes place in an actual courtroom.
How Much Does Chapter 13 Bankruptcy Cost In Texas
How much does it cost to file Chapter 13 bankruptcy? If you qualify to file Chapter 13 Bankruptcy, the Texas Bankruptcy Courts filing fee for a Chapter 13 Bankruptcy is a fixed rate of $310.00. The Bankruptcy trustee may charge an additional $15 to $20 or may waive this fee.
Mandatory credit counseling fees will range between $20 and $100. Attorneys fees will range between $975 and $2,000 on average. All in, the total cost of your Chapter 13 Bankruptcy will likely be from $1,320 on the low side to $2,430 on the high side. If you cannot pay the filing fee at once due to your financial circumstances, most courts will allow you to explain the circumstances and request to break the payments up over time.
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Two Cases Pending Within 12 Months
If you had two cases pending within the previous 12 months, you might be allowed to file a third case, but the automatic stay will not go into effect at all unless you ask the court to impose it.
To determine if you deserve the automatic stay, the court will look at several factors including:
- The number of cases you filed
- Whether your cases were dismissed because of non-payment, error , failure to file the required paperwork, or failure to cooperate with the trustee
- Whether you dismissed your case after a creditor filed a motion for relief from the automatic stay
- Whether your circumstances have changed since your previous case was dismissed
What If You Didn’t Receive A Discharge In The First Case
In most situations, you can file again and receive a discharge in the second bankruptcy if you didn’t receive one in the first matter. But that’s not always the case. Also, you lose the full benefits of the automatic staythe order that stops creditors from collectingwhen you file multiple bankruptcies in quick succession.
The court dismissed the first case
- Unless the court orders otherwise, you can file again. A 180-day waiting period may apply if you failed to obey a court order or appear in the case, or you voluntarily dismissed the case after a creditor filed a motion for relief from the bankruptcy stay.
The court denied your discharge
- You might be able to file again, but you probably won’t be entitled to a discharge of the debts listed in your first case. This is another unusual circumstance wherein you would be wise to seek the advice of an experienced bankruptcy lawyer.
Your First Bankruptcy Petition Did Not Result In A Discharge
If you filed a bankruptcy petition under chapter 7 or 13 that was dismissed before you were granted a discharge, you can usually file a new petition at any time. There are certain exceptions to this rule that depend upon the reason for the dismissal. You should before filing the second petition to learn whether a waiting period applies in your case.
If you filed a bankruptcy petition under chapters 7 or 13 and the court denied a discharge, you can generally file a new petition at any time, but you usually cannot receive a discharge of debts that you listed in the first petition. Again, you should consult a bankruptcy attorney to learn whether exceptions to the general rules apply in your specific case.
Take Second Mandatory Debt Education Course
You must take a second mandatory debt education course in Texas before filing for discharge. Once you receive the certificate of completion, your attorney or you would add that into your filing to show proof of completion.
See the list of approved debtor education courses in Texas. Once filed, you now just have to wait for discharge.
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Are There Alternatives To Bankruptcy
Yes. Doing nothing is an option if you are judgment proof. If your property and income are exempt from creditors claims by law, then you have nothing the creditors can take from you. With the exception of past due child support, you can’t be put in jail for failing to pay a debt. If you are not judgment proof, you can negotiate a payment agreement with your creditors before filing for bankruptcy. The Federal Trade Commission has tips on credit counseling at .
Attend The Meeting Of Creditors
The 341 meeting of creditors and the hearing where all debtors must attend in a bankruptcy proceeding. The meeting often occurs between 21 and 50 days after filing the petition. It generally takes 10 to 15 minutes. The meeting is a recorded conversation between the trustee, your bankruptcy attorney, and yourself about the paperwork you filed. The bankruptcy trustee will ask questions to ensure that you understand the bankruptcy process.
Do Creditors Show Up?
Understand Texas Court Locations
Many 341 meetings of creditors have been over the phone or over Zoom due to the pandemic. That said, you may want to see where the courthouse is in Texas if there are any meetings that need to take place in person. Below are the court locations for filing bankruptcy based on the bankruptcy district.
- 341 Pine Street, Room 2008Abilene, TX 79601
- 205 SE 5th Avenue, Room 133Amarillo, TX 79101-1559
- 1100 Commerce Street, Room 1452Dallas, TX 75242
- 501 West 10th Street, Room 310Fort Worth, TX 76102-3673
- 1205 Texas Avenue, Room 209Lubbock, TX 79401-4091
- 33 E. Twohig Avenue, Room 202San Angelo, TX 76903-6451
- 1000 Lamar Street, Room 203Wichita Falls, TX 76301
- 1701 W. Business Hwy 83McAllen, TX 78501
- 312 S. Main, Room 406Victoria, TX 77901
- 300 Willow Street Suite 104Beaumont, Texas 77701
- 100 East Houston Street Room 125Marshall, Texas 75670
- 500 North State Line AvenueTexarkana, Texas 75501
- 211 West Ferguson Street Room 106Tyler, Texas 75702
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Consider The Pros Of Double Filing
Getting a Chapter 7 discharge and immediately filing for Chapter 13 will give you more time to pay back debts that cannot be discharged, such as child support or spousal support.
Similarly, if you just need more time to pay off your debt, you can consider filing for a second Chapter 13 early. This will not discharge any debt but adds another five years to your bankruptcy payment plan. This will buy you more time instead of having automatic wage garnishment applied to your paychecks.
If you did not receive a discharge during the first filing, you might get one in the second bankruptcy.
If you are considering double filing, you need to work with a bankruptcy lawyer to get it right. There are many nuances that could lead a court to declare that you have filed again in bad faith.
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Myth #: Personal Bankruptcy Will Ruin Your Family
Lots of things lead to family problems, but bankruptcy may actually offer a solution to some of your problems. You may be on the brink of divorce because of your financial crisis. Our Firm sees this a lot. In some cases, you can put a stop to the family problem by filing for bankruptcy and getting a fresh, financial start.
Although filing for bankruptcy can be a very difficult decision in your life, the absence of all this stress may give your relationship a fighting chance.
Need more information about bankruptcy? Please at 281-888-5581. The road to financial freedom starts here.
Get Answers. Get Help.
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How To Get A Discharge In The First Place
Most debt can be discharged in a personal bankruptcy case, with the exception of student loans and tax debt. So long as you qualify for the bankruptcy chapter under which you file, most consumer bankruptcies filed with the help of an attorney are discharged and youll pay pennies on the dollar for your debt.
Your bankruptcy discharge can be denied, however, if you do any of the following:
1. Attempt to defraud: If you transfer, move, or conceal property, youre in big trouble. Make sure to talk about all transfers before your bankruptcy filing with your bankruptcy attorney.
2. Conceal or destroy information: This also goes along with failing to keep information on your financial situation in the first place. Keep all records on your finances in a safe and organized place.
3. Lie: A no-brainer, but, any sort of false statement made under penalty of perjury may not only land you back in court, but in jail.
4. Lose assets: This is when you cant explain any sort of loss or deficiency in assets.
5. Refuse to comply with a court order: Similar to lying, disobeying the court is a bad idea.
6. Fail to take an instructional course: When you file for bankruptcy, you must take two instructional courses in finances. One is about credit counseling, while the other is about financial management. These courses are mandatory under the federal law that governs bankruptcy.
Myth #: Some Creditors Are Immune From The Bankruptcy And Can Still Sue You
This is absolutely false. In fact, one of the primary reasons to file bankruptcy is to eliminate ALL collection activities. When you file the bankruptcy petition, whether through Chapter 7 or Chapter 13, you and your property receive automatic protection from the court against your creditors , which also includes the creditors attorneys, collection agencies, representatives, and/or agents.
Federal law specifically prohibits your creditors from contacting you for any reason, including through written correspondence, monthly bills, or phone calls. Creditors must cease all collection efforts against you, meaning they cannot file a new suit, continue a prior lawsuit, or collect on a prior legal judgment.
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Chapter 20 Bankruptcy: Filing Another Bankruptcy Before The Time Limit Is Up
The time limits above refer to how long a debtor has to wait to discharge debt through another bankruptcy. If you aren’t looking for another debt discharge, but would like to arrange a plan to manage your remaining debts, filing a Chapter 13 bankruptcy immediately after a Chapter 7 discharge might be an option for you.
Filing for Chapter 7 and Chapter 13 in succession is informally called a “Chapter 20 bankruptcy.” The process of filing for Chapter 13 right after the Chapter 7 discharge process can be complicated, and many courts will not allow a double filing before the time limit is up. An attorney can explain the strategy behind double filing and how it may fit into your specific circumstances.
Myth #: Bankruptcy Will Destroy Your Credit Score
While your credit rating will be affected when you file, it will not be destroyed forever. Depending on your situation and level of debts, you may actually increase your credit score by filing for bankruptcy. Bankruptcy helps eliminate the negative consequences of your unpaid debts, whether you file under Chapter 7 or Chapter 13. All negative activity will terminate, including interest, late fees, collection fees, and attorney fees. Ten years after filing, the bankruptcy will also be removed from your credit report, revealing a clean slate.
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Qualifying For Chapter 12 Bankruptcy
You as an individual, you and your spouse, or the corporation or partnership in which you are an owner can file a Chapter 12 case only if the individual or business entity filing the case meets the special definitions of a family farmer or family fisherman with regular annual income found in subsections 101 and of the Bankruptcy Code. For farmers and ranchers, here are the qualifications:
- Debt limit: total debt of no more than $3,792,650.
- Farming debt ratio: at least 50% of the total debt of the individuals or business entity is from the farming operation ), excluding the debt on the principal residence .
- Farming income ratio for individuals: more than 50% of the gross income must have been received from the farming operation.
- Ownership: more than 50% of the business ownership must be in one family, or in that family and its relatives.
- Asset ratio: more than 80% of the entitys assets must be from its farming operation.
The Advantages Of Chapter 13 Bankruptcy In Texas
Here are some potential benefits of even a straightforward Chapter 13 case, none of which are available under Chapter 7:
The Texas Homestead Exemption
Texas is one of a small handful of states which provide an unlimited homestead exemption for your home, meaning that it does not matter how much it is worth or how much equity you have in it. Most states have a maximum amount you can protect, and after that it could be sold to pay your creditors. Not in Texas. Theres no limit.
With Texas homestead exemptions, there are some acreage maximums10 acres in a city, town or village, 100 acres in the country . And federal bankruptcy law applies a maximum to amount of equity you can protect if you bought your Texas home less than 1215 days before filing the bankruptcy case.
Exceptions To Discharge From Personal Bankruptcy In Nine Months
The length of your bankruptcy will be nine months, unless one or more of the following is true:
- You fail to perform all your bankruptcy duties, such as regular payments of surplus income to the trustee.
- You have surplus income .
- You have been bankrupt before.
- There is an objection filed to your discharge.
How much longer your bankruptcy period will be depends on the details of your case. Twenty-one month is typical when the bankrupt individual makes a good salary .
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Filing For Bankruptcy You Must List All Of Your Assets
Basically, whenever you file bankruptcy, you are required to list ALL of your assets.
Your assets include the following:
- Your house
- Financial assets
- Other tangible items
Your assets may also include some things that are easily forgotten like bank accounts, life insurance, inheritance, and potential lawsuits.
A good bankruptcy attorney will give you some type of workbook to help you remember your assets. Take your time when filing this workbook out.
Forgetting to list an asset can cause you to lose that asset. Once you have listed all of your assets, your bankruptcy attorney will look at exemptions to determine if your assets are exempt.
When Are You Ineligible To File For Bankruptcy Again
You cant file a case under any chapter for 180 days after the dismissal of your most recent case. Other things that make you ineligible include certain requests made to the bankruptcy judge in the prior case, or certain orders entered granting those requests.
The question is whether you have a right to file a case at all. If you, the debtor, file a case when you are ineligible, the court will swiftly dismiss the new case and impose a further period of ineligibility .
Section 109 of the Bankruptcy Code lays out who is eligible to be a debtor that is, who may file a bankruptcy case, and under what chapter. Section 109 says that if your prior bankruptcy case was dismissed for either of two reasons/circumstances, you will not be eligible to file another case until 180 days after the dismissal of your prior case.
Here are the two ways that dismissal of a prior case can prohibit you from filing a second case until the 180-day period passes:
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