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Chapter 13 Bankruptcy Texas
Chapter 13 is named for the specific section of the bankruptcy code that allows for the personal reorganization of debt.
You should always consult a bankruptcy attorney before filing for bankruptcy.
Chapter 13 bankruptcy in Texas
A Chapter 13 bankruptcy is a "reorganization" bankruptcy that allows people with regular income to repay all or part of their debts. Under this plan, you make regular monthly payments to a trustee who then distributes money to creditors.
Chapter 13 is designed for people who have a steady income and want to keep their property, while Chapter 7 is for people who don't have a lot of assets and want to discharge their debt. Chapter 13 allows you to catch up on car payments and missed mortgage payments.
Who can file for chapter 13 bankruptcy in Texas
According to federal law, any individual can file for chapter 13 as long as the individual's combined total secured and unsecured debts are less than $2,750,000.
You cannot file for Chapter 13 bankruptcy in Texas if, within the past 180 days, a prior bankruptcy petition was dismissed due to willful failure to appear or comply with the court or was voluntarily dismissed
How to file for chapter 13 bankruptcy in Texas
To file for Chapter 13 bankruptcy in Texas, you must complete a credit counseling course with an approved agency within 6 months of filing your petition.
Next in the bankruptcy process, you will need to fill out the following forms:
- Form 101 (“Voluntary Petition for Individuals Filing Bankruptcy”)
- Certificate of completion for required credit counseling
- Form 106Dec (Declaration About an Individual Debtor's Schedules)
- Form 106Sum (Summary of Your Assets and Liabilities and Certain Statistical Information) details the total value of your property, total debt amounts, and information about income and expenses.
- Form 106A/B (Schedule A/B: Property) lists all belongings and must include an estimate of how much they could be sold for.
- Form 106C (“Schedule C”) instructs the bankruptcy trustee as to what property is protected by an exemption.
- Form 106D (Schedule D) lists secured debt like real property (like a house) or personal property (car loans)
- Form 106E/F (Schedule E/F) lists all other debts like credit card debt
- Form 106G (Executory Contracts and Unexpired Leases (individuals)) includes home rentals, car leases, or other long-term contracts.
- Form 106H (Schedule H: Your Codebtors) must be filed even if there are no co-debtors
- Form 106I (Schedule I) lists all income, including unpaid commissions for personal services
- Form 106J (Schedule J: Your Expenses (individuals)) includes how much you spend monthly on things like rent, food, transportation, etc
- Form 107 (Your Statement of Financial Affairs for Individuals Filing for Bankruptcy) covers information about your financial situation that is not part of the schedules, including pending legal actions
- Form 113 (Chapter 13 Plan) FYI - courts often require a local plan form instead of the official form. This is your repayment plan.
- Form 121 (Your Statement About Your Social Security Numbers)
- Form 122C-1 (Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period)
- Form 122C-2 (Chapter 13 Calculation of Your Disposable Income)
- Form 423 (Certification About a Financial Management Course)
- 2010 Notice Required by 11 U.S.C. §342(b) for Individuals Filing for Bankruptcy
- A creditor matrix is a list of all creditors and their addresses and is usually accompanied by verification. Ask your local bankruptcy court for the preferred format.
- Pay the filing fee of $245
You may need the following forms:
- Form 101A (Initial Statement About an Eviction Judgment Against You) is filed if you’re behind on your rent and your landlord has received a judgment to evict you.
- Form 101B (Statement About Payment of an Eviction Judgment Against You) is filed if you have an eviction judgment against you.
- Form 106J-2 (Schedule J-2: Expenses for Separate Household of Debtor 2) is filed by a married couple who both filed for bankruptcy but do not live together.
- Form 119 (Preparer's Notice, Declaration and Signature)
- 2030 Disclosure of Compensation of Attorney for Debtor
Finally, you may need to file local forms as your bankruptcy court district requires. Always ask the clerk what forms you need to file and what format they prefer. As you can see, the Texas bankruptcy process can be very complex.
The benefits of filing chapter 13 bankruptcy in Texas
The Pros of Chapter 13 Bankruptcy
- Consolidates debt into one affordable payment
- Keep your home and car as long as you are making payments
- Makeup mortgage arrears without penalty or interest and can stop foreclosure proceedings
- Usually, you can keep an income tax refund
- May be able to discharge some tax debt
- Opportunity to repay creditors over a longer period of time
- May reduce the debt amount or interest rate that you owe
- Stop defaults and missed payments to help structure a plan to pay back debts in a timely manner
- Automatic stay on your debts once you file
The Cons of Chapter 13 Bankruptcy
- Stays on credit for 7 years. For more about credit scores, follow this link.
- The following debts are not included:
- tax debt or government fees
- mortgages
- child support obligations or alimony
- any student loan debt
- any car loan
- Takes up to 5 years to complete
- High fees and costs
- Can lose your home and assets
The disadvantages of filing for chapter 13 bankruptcy in Texas
Some of the disadvantages of filing bankruptcy in Texas include the cost, the amount of time invested, the possibility of losing your home, and credit damage. However, if you really need to file for bankruptcy, you should speak with a bankruptcy attorney to understand what will happen.
Texas Bankruptcy Exemptions
Texas bankruptcy exemptions include the following if you have lived in Texas for the previous 730 days.
Texas Homestead Exemption
This exemption protects unlimited equity in your principal residence. It applies to properties of 10 acres or less in a city or 100 acres or less (families can double this to 200 acres) in the country
Texas Motor Vehicle Exemption
This allows you to exempt the entire value of one motor vehicle per licensed household member. Motor vehicles must be included in the $50,000/$100,000 exemption cap.
Texas Personal Property Exemptions
The exempt personal property other than real estate cannot exceed a total of $50,000 (single adult) or $100,000 (family). You must include the following items in the paperwork:
- Home furnishings, including family heirlooms
- Clothing and food
- Farming and ranching vehicles and implements
- Tools of the trade, books, equipment, commercial boat, or vehicles
- Jewelry is limited to $12,500 (single filer) and $25,000 (family)
- Two firearms
- Athletic and sporting equipment, including bicycles
- Animals, including pets and domestic animals plus their food; two horses, mules, or donkeys, plus tack; 12 head of cattle; 60 head of other livestock; and 120 fowl
Not included in the cap:
- Current wages except for court-ordered support
- Health aids such as wheelchairs, canes, and hearing aids
- Alimony, support, and maintenance
- Bibles or other books containing sacred religious writings
- Burial plots
Pensions and Retirement Accounts
Most tax-exempt pensions and retirement accounts are exempt including:
- Qualified retirement plans
- State employees; teachers; judges; county and district employees; municipal employees.
- Firefighters; policemen
Insurance Exemptions
Texas allows people to set aside some insurance benefits.
- Fraternal benefits society benefits
- Life, health, accident, or annuity benefits, including any money, policy proceeds, or cash value due to or paid to the beneficiary or insured
- Texas state employee group life insurance
Other Bankruptcy Exemptions
Texas offers exemptions on other financial affairs.
- College savings plans
- Crime victim's award
- Public officers killed in duty survivors benefits
- AFDC, welfare, and foster care benefits
- Medical assistance
- Interest in specific partnership property
- Unemployment benefits and workers' compensation
FAQ
Chapter 13 Bankruptcy Alternatives
There are some alternatives to bankruptcy if you live in Texas. Companies like Pacific Debt can help you reduce debt without going through bankruptcy.
Pacific Debt Relief
We are a debt settlement company that can help you to settle debts and pay the settled amount without the expense, effort, embarrassment, and credit damage that comes with bankruptcy. Our monthly payment plan is based on your budget.
If you are considering filing Chapter 13 bankruptcy in Texas, call us for a free consultation with one of our award-winning debt specialists. The specialists will help you understand all your options.
To learn more about debt settlement, check out this link.
Pacific Debt Relief
750 B Street Suite 1700
San Diego, CA 92101
Hours of Operation
Mon-Thurs: 6am - 7pm PST
Friday: 6am - 4:30pm PST
Saturday: 7:30am - 4:30pm PST
Clients
Phone: (877) 722-3328
Fax: (619) 238-6709
Email: cs@pacificdebt.com
Non-Clients
Phone:
Fax: (619) 238-6709
Email: inquiries@pacificdebt.com
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