There are many contributing factors that are associated with financial hardship. Some common reasons include personal debt, divorce, loss of a job, illness, or foreclosure.

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In fact, the average credit card debt in Texas is a whopping $6,008 per person. In addition, foreclosure rates are also as staggering, one out of every 3,695 TX homes is currently in foreclosure.

If you have found yourself in similar situations, then you are more than likely battling other personal issues that come with living in debt. The fear of losing your car, home or your money can drain a person emotionally & physically. You have probably even considered Filing Chapter 7 or Chapter 13 Bankruptcy .

If you are thinking “Can I File Bankruptcy?” you are undoubtedly not alone. Around a million people file bankruptcy each year in America. Bankruptcy is a means created by the US Government to help struggling Americans find relief from overwhelming debt. You may want to check your eligibility for bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy offers people the chance to resolve their debt while still working with lenders in a legal capacity. It is initiated by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or married couples jointly. When the bankruptcy is settled, the filer will ‘exit’ and will have a chance for a fresh start on their finances.

During a bankruptcy, a trustee is appointed to oversee the particulars of the case. His or her duties will vary and depend on whether the individual has filed for Chapter 13 or Chapter 7 bankruptcy.

Did you know that Texas ranks #46 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 132 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

People in Texas, who claim bankruptcy, will elect to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. Want to know the difference? Take a look at the descriptions below for more information:

Chapter 7

The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.

Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation

Chapter 13

If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to keep his or her valuable assets over a 3- to 5-year period.

In order to determine which chapter a person will file, they will have to determine their ability to repay using the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It considers your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

For those who do not qualify for a Chapter 7 filing, he or she will be able to file for Chapter 13, as described above.

What Are Bankruptcy Exemptions?

The federal bankruptcy exemptions are a list of exclusions by Congress that are available to filers in specific states. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.


Unlimited amount for homestead exemption. However, the property claimed cannot be 10 acres in urban (town, village, city) setting or 100 acres (200 acres for families) elsewhere. Sales proceeds from a homestead property are exempt for 6 months. To claim a homestead exemption, one must file a homestead declaration; if you do not, the court will file one on your behalf and charge you for it.

Personal Property

The following items are wholly exempt and does not count towards the aggregate limit cited above:

  • Bible or other book containing sacred writings of a religion
  • Burial plots
  • Health aids

The following personal property may be exempt, either wholly or up to the dollar amount given, and do count towards the aggregate total cited above:

  • Athletic and sporting equipment, including bicycles
  • Clothing and food
  • Health savings accounts
  • Home furnishings including family heirlooms
  • Jewelry (capped at 25% of total exemption)
  • Pets/domestic animals and their food:
  • 2 horses, mules or donkeys & tack
  • 12 head of cattle
  • 60 head of other livestock
  • 120 poultry
  • Single 2-, 3-, or 4-wheeled motor vehicle per family member or single adult with driver’s license (or if not licensed, relies on someone else to operate the vehicle)
  • 2 firearms


  • Life, health, accident or annuity benefits, monies, policy proceeds & cash values due or paid to beneficiary or insured
  • Church benefit plan benefits
  • Fraternal benefit society benefits
  • Texas employee uniform group insurance
  • Texas public school employee group insurance
  • Texas state college or university employee benefits

Pensions (note: tax-exempt retirement accounts such as 401(k)s, 403(b)s, defined benefit plans, and traditional and Roth IRAs up to $1,095,000 are exempt under federal law)

  • ERISA-qualified government or church benefits, including Keoghs and IRAs
  • Retirement benefits to the extent they are tax-deferred
  • Pensions for the following occupations are exempt under TX law:
    • County and district employees
    • Firefighters
    • Judges
    • Municipal employees, elected officials and state employees
    • Police officers
    • Survivors of law enforcement officers, firefighters and emergency medical personnel
    • Teachers

Public Benefits

  • Crime victims’ compensation
  • Medical assistance
  • Public assistance
  • Unemployment benefits
  • Workers’ compensation


  • Wages:
    • Earned but unpaid wages
    • Unpaid commissions not to exceed 25% of total personal property exemptions (see above)
  • Alimony and child support
  • Higher education savings plan trust account
  • Liquor licenses and permits
  • Prepaid tuition plans
  • Property of business partnerships
  • Farming or ranching vehicles and implements (counts in the aggregate limits for personal property)
  • Tools, equipment (including boat and motor vehicles used in trade) and books (counts in the aggregate limits for personal property)

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

Current bankruptcy laws do not require individuals to hire an attorney to declare bankruptcy relief. People are allowed to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not recommended.

Filing Bankruptcy without an Attorney

A basic Chapter 7 filing that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that may not require an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

Most of the time, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy lawyer is there to represent you and not the creditors.

An attorney is also keenly familiar with exemption laws. In addition, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in TX, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In Texas

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In Texas

Plaza Tower
110 North College Avenue
Tyler,TX 75702
Texas Eastern Bankruptcy Court

Wells Fargo Bank Building
660 North Central Expressway
Plano,TX 75074
Texas Eastern Bankruptcy Court

Jack Brooks Federal Building and United States Courthouse
300 Willow Street
Beaumont,TX 77701
Texas Eastern Bankruptcy Court

United States Courthouse
511 East San Antonio Avenue
El Paso,TX 79901
Texas Western Bankruptcy Court

Hipolito F. Garcia Federal Building and United States Courthouse
615 East Houston Street
San Antonio,TX 78205
Texas Western Bankruptcy Court

Homer Thornberry Judicial Building
903 San Jacinto Boulevard
Austin,TX 78701
Texas Western Bankruptcy Court

United States Courthouse
800 Franklin Avenue
Waco,TX 76701
Texas Western Bankruptcy Court

United States Courthouse
1133 North Shoreline Boulevard
Corpus Christi,TX 78401
Texas Southern Bankruptcy Court

Bentsen Tower
1701 West Business Highway 83
McAllen,TX 78501
Texas Southern Bankruptcy Court

Bob Casey United States Courthouse
515 Rusk Street
Houston,TX 77002
Texas Southern Bankruptcy Court

United States Courthouse
601 25th Street
Galveston,TX 77550
Texas Southern Bankruptcy Court

Eldon B. Mahon United States Courthouse
501 West Tenth Street
Fort Worth,TX 76102
Texas Northern Bankruptcy Court

Earle Cabell Federal Building and United States Courthouse
1100 Commerce Street
Dallas,TX 75242
Texas Northern Bankruptcy Court

George H. Mahon Federal Building and United States Courthouse
1205 Texas Avenue
Lubbock,TX 79401
Texas Northern Bankruptcy Court

J. Marvin Jones Federal Building
205 East Fifth Avenue
Amarillo,TX 79101
Texas Northern Bankruptcy Court


Additional Texas Resources

Foreclosure Help Program

Disability SSDI Benefits