If you’re struggling with overwhelming debt, filing for bankruptcy can offer a fresh financial start. However, bankruptcy law is governed by federal law, not Texas state law — but Texas does have some of the most generous exemption laws that protect your property in bankruptcy. Understanding how bankruptcy works, what you can keep, and why it’s crucial to have a skilled bankruptcy lawyer in Texas by your side can make all the difference.

Why You Need a Bankruptcy Lawyer Near Me — It’s Not as Simple as It Seems

Filing bankruptcy might seem like a straightforward way to erase debt, but the reality is far more complex. The process requires detailed paperwork, strict deadlines, and strategic decisions about exemptions and repayment plans. Mistakes can lead to:

• Loss of property you hoped to keep
• Denied discharge of debts
• Prolonged court battles
• Increased financial stress

Trying to “file bankruptcy yourself” puts you at risk of costly errors. A qualified bankruptcy lawyer near you ensures your paperwork is correct, your rights are protected, and your case moves smoothly through the court.

---

How to File Bankruptcy in Texas: The Process and Timeline

Step 1: Choose Your Bankruptcy Chapter

Most Texans file either Chapter 7 or Chapter 13 bankruptcy.

• Chapter 7 (“fresh start” bankruptcy) can discharge most unsecured debts quickly, usually within 3-6 months. It may require selling non-exempt assets, but Texas exemptions often protect your property.
• Chapter 13 involves a 3-5 year repayment plan allowing you to keep your assets and catch up on missed secured payments like mortgage or car loans.

Specialized chapters like Chapter 12 exist for family farmers and ranchers, offering flexible debt restructuring.

Step 2: Credit Counseling and Filing the Petition

Before filing, you must complete a credit counseling course from an approved provider. Then, your attorney will prepare and file your bankruptcy petition and required schedules listing your assets, debts, income, and expenses.

Step 3: Automatic Stay Protects You Immediately

The moment you file, the automatic stay goes into effect. This legal injunction stops creditors from wage garnishment, lawsuits, collection calls, and repossessions.

Step 4: Trustee Review and 341 Meeting

A court-appointed trustee reviews your case and assets. About 30 days after filing, you’ll attend the 341 meeting of creditors, where the trustee will verify your information. Creditors rarely appear, but the trustee’s role is critical.

Step 5: Discharge or Repayment Completion

• For Chapter 7, you typically receive a discharge within a few months, wiping out qualifying debts.
• For Chapter 13, after completing your repayment plan (3-5 years), remaining eligible debts are discharged.

---

Texas vs. Federal Exemptions: What Property Can You Keep?

You must choose either Texas exemptions or federal exemptions — you cannot mix both.

Texas Exemptions (Best if You’ve Lived in Texas 2+ Years)

Texas has some of the most generous exemptions in the country, especially the homestead exemption:

• Homestead Exemption:
  • Unlimited dollar value (with federal limits)
  • Covers up to 10 acres in urban areas, or up to 200 acres for couples and 100 acres for individuals in rural areas
  • Proceeds from selling your homestead are protected for 6 months
  • Protects against general creditors but not mortgages, tax liens, or home improvement loans
• Personal Property Exemptions:
  • Up to $50,000 for individuals, $100,000 for families
  • Includes home furnishings, food, clothing, tools of your trade, one vehicle per licensed household member, jewelry (up to 25% of exemption), two firearms, certain animals (pets, livestock), life insurance cash value, retirement accounts (401k, IRA), unpaid wages, and health aids
• Not Exempt:
  • Cash and bank account money
  • Tax refunds
  • Stocks or mutual funds (unless held in retirement accounts)

Federal Exemptions (Only in Bankruptcy Cases)

Federal exemptions may be more flexible if you lack a homestead or live in Texas less than 2 years:

• $27,900 in homestead equity (as of April 2022; doubled if married)
• $4,450 in one vehicle
• $14,875 in household items (up to $700 per item)
• $1,875 in jewelry
• Wildcard exemption: $1,475 plus up to $13,950 of unused homestead exemption
• $2,800 in tools of the trade
• Full protection for most life insurance, retirement plans, and government benefits (Social Security, disability, etc.)

---

Special IRS Seizure Rules

IRS seizures follow federal tax laws, not bankruptcy exemptions. The IRS can seize nearly everything except:

• Modest household goods and personal effects (up to $1,650)
• Trade tools and books (up to $1,100)
• Certain benefits like Social Security and veterans’ benefits
• Portions of wages for child support orders
• Your home, but only with IRS director’s approval (commonly granted)

---

Residency Rules & Homestead Cap

• You must have lived in Texas for at least 2 years to claim Texas exemptions.
• If you purchased your homestead within the last 3 years and 4 months or transferred assets to defraud creditors, your homestead exemption may be capped at $170,350.

---

What Could Go Wrong Filing Bankruptcy Without a Lawyer?

• Missing key deadlines and paperwork errors can cause your case to be dismissed.
• Choosing the wrong exemptions can force you to lose property unnecessarily.
• Improperly handled repayment plans can lead to foreclosure or repossession.
• You risk not receiving a full discharge of debts due to procedural mistakes.
• Creditors might continue collection efforts if the automatic stay is not properly enforced.

---

Why Choose Our Texas Bankruptcy Lawyers?

Our experienced attorneys in Dallas, Fort Worth, and Plano help Texans navigate these complexities. We protect your rights, maximize exemptions, and guide you through the process smoothly, so you avoid costly mistakes.

---

Bankruptcy Statistics in Texas and Nationwide

• Approximately 750,000 bankruptcies are filed annually in the U.S.
• Texas accounts for over 70,000 bankruptcy filings per year, with Chapter 13 filings more common than Chapter 7, unlike the national trend.
• The average Chapter 7 bankruptcy case lasts about 4-6 months, while Chapter 13 plans extend from 3 to 5 years.

For more information on bankruptcy statistics, visit the U.S. Courts Bankruptcy Statistics page.

---

Take the First Step Today

If you’re searching for a bankruptcy lawyer near me or need a trusted bankruptcy lawyer in Texas, don’t risk your financial future going it alone. Contact our law firm today for a free consultation and learn how we can help you take control, protect your property, and rebuild your credit.

test