How to File for Bankruptcy in Texas

Bankruptcy is a legal term that essentially means you can no longer pay your debts and are in need of serious financial assistance. By filing for bankruptcy, your debts are halted until you can sort your finances out and figure out a solution, whether it be a payment plan or asset liquidation. If you live in Texas and your finances are in jeopardy, you may be wondering how to file for bankruptcy in Texas. Texas’s laws are a little different when it comes to filing for bankruptcy, so a thorough understanding of these laws is vital.

How to File for Bankruptcy in Texas

How to File for Bankruptcy

  1. Gather Your Financial Information: Before deciding whether or not to declare bankruptcy, you need to lay out your finances in a coherent way. Any assets you have, your outstanding debt, any loans you have taken out, alimony you may be paying, all of it. Consider all this information and decide if bankruptcy should be your next step.
  2. Consult with a Bankruptcy Attorney: Every state has minor differences in the bankruptcy process. Consulting with an experienced bankruptcy lawyer can clarify things for you and give you an opportunity to weigh your options with someone who knows the ins and outs of Texas bankruptcy law.
  3. Choose Your Type: There are significant differences between Chapter 7 and Chapter 13 bankruptcy. Each has its own benefits and drawbacks, and a bankruptcy lawyer can help you understand the impact each can have on your situation to help you make the correct choice.
  4. Credit Counseling: Before you file for bankruptcy, federal law requires that you undergo credit counseling within 180 days of your filing. A counselor will review your finances and help you create a budget.
  5. Prepare Your Petition: Consult with your attorney and prepare your bankruptcy petition. Leave no stone unturned. Consider everything relevant to your situation. Making any mistakes can slow the process.
  6. File Your Petition: You must file your bankruptcy petition in federal court. Your lawyer can help you find out which court to file in, as Texas has four options. Once your petition has been filed, a notice will be sent to your creditors. A judge will decide if you are eligible for bankruptcy.
  7. Meeting of Creditors: You are required to attend a meeting of creditors, which is essentially a conference with a bankruptcy trustee who reviews your information and ensures there are no discrepancies. Your lawyer will help prepare you for this meeting.
  8. Debtor Education Course: Finally, you must take a debtor education course, which will assist in showing you how to better manage your finances in the future. Once completed, you will fill out a form that proves you completed the course.

Filing for Chapter 7 Bankruptcy in Texas

For the most part, filing for bankruptcy in Texas is not all that different from filing in any other state. Bankruptcy law is federal law, but Texas has state-specific exemption laws that can make things a little different in the Lone Star State.

Filing for Chapter 7 bankruptcy is a solid option for people who need faster and cheaper financial relief. It only takes a few months to complete, and in the end, you do not have to pay anything. In a Chapter 7 bankruptcy case, you will essentially forfeit the rights to nearly all of your significant assets except what you need to live a basic, functional life, such as a home and a vehicle.

Your luxury items, such as second homes and valuable collectibles, will be seized and liquidated to pay back as much as possible of your outstanding debt.

Filing for Chapter 13 Bankruptcy in Texas

Chapter 13 bankruptcy allows you to enter a payment plan for a duration of three to five years, allowing you to keep your assets and giving you time to repay your debts. You only qualify for Chapter 13 if your family’s income is less than the median income for the average family of the same size in your state.

Texas Exemptions

What makes Texas a bit different from other states are its exemption laws. Here are a few:

  • Texas Homestead Exemption: Texas allows you to exempt your family homestead if it’s 10 acres or less in a city or town or 100 acres or less in the country.
  • Texas Motor Vehicle Exemption: Texas lets you exempt one full vehicle per household member with a valid license.
  • Texas Personal Property Exemption: Texas lets you exempt personal property that does not exceed $50,000 for a single person or $100,000 for a family.


Q: How Do You Qualify for Bankruptcy in Texas?

A: Qualification for bankruptcy in Texas is almost entirely dependent on your income. If your annual income is below the median income for the average household of your size, you may automatically qualify for Chapter 7 bankruptcy. Regardless, you will need to pass a means test to determine if your income qualifies for bankruptcy.

Q: Do You Need a Lawyer to File for Bankruptcy in Texas?

A: No, you do not need a lawyer to file for bankruptcy in Texas. However, it couldn’t hurt to seek the advice of an experienced legal professional who understands how bankruptcy law works in your state. Bankruptcy is a big, complex decision that will affect your financial future. It is not something to be entered into lightly. Seeking assistance is always a viable option.

Q: How Much Cash Can You Keep When Filing Chapter 7 in Texas?

A: Texas allows for a personal property exemption when filing for bankruptcy. Under that exemption, you are allowed to claim up to $50,000 for a single-person household and up to $100,000 for a family unit. Any property you claim will have its value added to your total exemption, so make sure you think about what you absolutely need to keep.

Q: Can You Be Denied Bankruptcy in Texas?

A: There are some situations where you can be denied bankruptcy in Texas. For example, you can be denied if you have already received a bankruptcy discharge at some point in the past eight years, if you were already dismissed from bankruptcy in the past 180 days, or if you have defrauded your creditors in the past.

Talk to a Bankruptcy Lawyer Today

The legal team at Steele Law Firm, PLLC, is prepared to help you understand how bankruptcy can affect you and your family. Dealing with bankruptcy alone can be daunting, but we are here to help. Contact us to schedule a consultation as soon as you can.

We Can Help

contact us today
fort worth magazine logo top attorney for 2021 badge


Schedule a Free Initial Consultation
3632 Lafayette Avenue
Fort Worth, TX 76107
This field is for validation purposes and should be left unchanged.