The bankruptcy process can be a confusing and daunting task. Bankruptcy is a legal proceeding that allows people experiencing financial hardship to discharge or remove from their balance sheet many of the debts they owe without having to pay them back.
If you live in Texas and have been struggling with debt for quite some time now, it may be time to consider filing bankruptcy. Bankruptcy is a powerful tool that allows individuals and families to reorganize their finances and get back to financial stability.
Here’s what you need to know about filing for bankruptcy in Texas:
Understanding the Types of Bankruptcy in Texas
There are two types of bankruptcy that people can file when experiencing financial hardships – Chapter 7 and Chapter 13.
Chapter 7 bankruptcy, also commonly referred to as liquidation bankruptcy, is a type of bankruptcy that allows individuals or families struggling financially to discharge their debts and get a fresh start by getting rid of most (if not all) of the non-exempt debt they owe.
On the other hand, Chapter 13 bankruptcy also helps people in Texas deal with their debt by putting them on a supervised repayment plan managed by the individual States’ Chapter 13 Trustee.
The answer to the question is chapter 7 the right bankruptcy plan or if you should go for chapter 13 will depend on your specific situation, income, amount of secured debt owned, etc. When making this decision, it is best to consult with a licensed attorney experienced in filing bankruptcy cases in your State.
What Paperwork and Documents You Need
You will need to acquire and prepare specific paperwork and documentation before filing bankruptcy in Texas. In addition, you will also be required to attend a meeting with the attorney that is helping you file for bankruptcy at their office or any other agreed-upon location.
Filing for bankruptcy requires you to compile many documents:
- Financial information about yourself and your spouse, if filing jointly;
- The last 60 days of pay stubs or earning statements. This document should show all wages earned by everyone in the household, including overtime;
- A list of all creditors and the amounts you owe them, along with their contact information;
- A list of property that is considered exempt by your State;
- You will need to make a list of all the property that is exempt by Texas, as well.
How Much Filing for Bankruptcy Costs
Filing for bankruptcy in Texas is not an easy decision to make, nor is it cheap. Under the new bankruptcy laws, filing for Chapter 7 will cost you $338 to file your petition with the court with the fee being subject to change. In addition, the attorney who files for this type of bankruptcy on your behalf will likely charge more than this amount for their services.
The filing fee for Chapter 13 bankruptcy is $313 and can also change at any time. This cost only covers the bankruptcy filing, while the attorney will charge an additional amount to prepare and file all of your necessary paperwork and documentation with the court.
How Much Time It Will Take
Filing for bankruptcy in Texas can take anywhere from a couple of weeks to a few months. However, in most cases, depending on your situation and the complexity of your case, it usually takes three to four months.
The time it takes to receive your discharge will also depend largely on what types of debt you have, how much obligation you have, and the number of creditors trying to collect this debt. Additionally, once you file for bankruptcy in Texas, your creditors cannot continue to contact you. This means that any further attempts at collecting your debt are illegal and punishable by law.
Protecting Yourself Before Filing for Bankruptcy
It is essential to consider all of your options before filing for bankruptcy in Texas. If you are behind on your payments, it is best to contact creditors, credit card companies, loan providers, etc., and work out a payment plan that will fit your budget.
This will help prevent your debts from piling up while giving you the time to work out a plan that will allow you to pay back what you owe. Additionally, you can speak to a licensed attorney about other options for paying off your debt.
Each individual or family has their own goals and challenges they are trying to overcome when filing for bankruptcy in Texas. However, regardless of why you need to file for bankruptcy, you need to be fully aware of all the pros and cons associated with this decision.
Just remember, you do have options, and the most important thing to remember is to make a plan for your future.