Chapter 7 Bankruptcy Lawyer

Chapter 7 is the most common type of bankruptcy and offers a financial fresh start for overwhelmed debtors. It is for individuals and small businesses who are overwhelmed by substantial debt who cannot afford to pay it off. Chapter 7 bankruptcy is the fastest and most efficient way to discharge the most amount of debts. However, not everyone qualifies for this type of relief. An experienced Texas Chapter 7 bankruptcy lawyer can evaluate your particular situation and explain whether you are eligible for this type of financial relief. We can also guide you through the process of discharging your debts and claiming valuable exemptions. Contact us today to schedule a confidential consultation to discuss your situation and options.

Find Out If You Qualify For Bankruptcy With a Free Bankruptcy Evaluation

Chapter 7 Bankruptcy Overview

Chapter 7 bankruptcy is called a “liquidation bankruptcy” because the idea is to sell property to pay off as much debt as possible and discharge the rest. However, in most Texas Chapter 7 bankruptcy cases, there are no assets sold off, due to generous exemptions.  As a result, in most cases you will not lose any property.  There is no limit to the amount of debt you owe to file for Chapter 7 bankruptcy. This is an efficient way to discharge / eliminate qualifying debts, such as, but not limited to:

  • Credit card debt
  • Medical debt
  • Personal loans
  • Collection agency accounts
  • Payday loans
  • Deficiency judgments
  • Civil court judgments
  • Past-due rent or utility payments
  • Active lawsuits
  • Certain IRS debt

With a Chapter 7 bankruptcy, these debts are discharged, meaning that you are no longer legally obligated to pay them.

Texas Bankruptcy Exemptions

Texas offers more generous bankruptcy exemptions than many other states and also allows debtors to choose whether to take state or federal exemptions. As such, many filers are able to keep all of their property.

Texas bankruptcy exemptions include:

  • Homestead – You can protect an unlimited amount of equity in your primary residence, including up to 10 acres if the property is in a city, town, or village, or up to 100 acres if the property is in a rural area. If you sell your home, Texas bankruptcy law allows you to keep the profits from the sale for six months.
  • Vehicle – Each licensed member of your household can keep the full value of one vehicle.
  • Personal property – Texas allows you to exempt up to $50,000 in personal property, which can include various types of property such as furniture, jewelry, books, clothing, athletic equipment, firearms, health aids, animals, health savings accounts, alimony, and child support.
  • Financial accounts – In addition to accounts protected by federal law, you can also protect accounts allowed by Texas bankruptcy law. This includes employee pension and retirement benefits for county and district employees, police and firefighters, teachers, and judges; ERISA-qualified church or government benefits; survivor benefits for civic employees; IRAs, Roth IRAs, and Keogh accounts; and other tax deferred retirement benefits.
  • Financial benefits – You can also protect unemployment compensation, workers’ compensation, crime victims’ compensation, and public assistance benefits.
  • Insurance – Various types of insurance policies are exempt under Texas law, including life, accident, health, and annuity benefits and various types of insurance for Texas employees, public school employees, or employees of Texas state colleges or universities.

Our team can help you maximize exemptions to keep as much property as possible.

Advantages of Filing Chapter 7 Bankruptcy

There are several advantages of filing Chapter 7 bankruptcy, including:

  • You get a fresh financial start because you are not bound to a long repayment plan.
  • You can eliminate most types of debt and the full balance of debt you owe.
  • An automatic stay is entered in your case to prevent creditor harassment or further collection activity.
  • Your wages are not garnished, and you can keep property you receive after the bankruptcy discharge.
  • Your case can potentially be resolved within a few months.
  • You can avoid foreclosure on your home or repossession of your personal property.
  • You can prevent termination of your utilities.

An experienced Texas bankruptcy attorney can explain these benefits during your confidential consultation.

Do I Qualify for Chapter 7 Bankruptcy?

The easiest way to qualify for Chapter 7 bankruptcy is to pass the means test, which compares your household income to the median income of the same-sized household income in Texas. In 2022, you pass the means test if your household annual income is less than:

  • $55,441 for a household of 1
  • $74,636 for a household of 2
  • $80,733 for a household of 3
  • $93,386 for a household of 4

Even if you do not have income above the amounts stated above, you may still qualify for Chapter 7 bankruptcy if you can show that you do not have sufficient disposable income to pay off your debts. A knowledgeable Chapter 7 bankruptcy attorney from our firm can evaluate your situation and determine if you qualify to file Chapter 7 bankruptcy.

Contact a Knowledgeable Texas Chapter 7 Bankruptcy Lawyer for Help

If you are in financial distress, you need an experienced Houston bankruptcy attorney who can competently guide you through your options. Our team has handled many Chapter 7 bankruptcy cases and will do everything possible to protect your assets. Contact us today for a confidential consultation to discuss your situation and learn how we can help.

Find Out If You Qualify For Bankruptcy With a Free Bankruptcy Evaluation