Chapter 13 Texas
The US Constitution gives Americans protection through the Bankruptcy Rules as set by Congress. However, each state has its own guidelines in place to protect citizens who can no longer pay their bills and need relief. This discussion will cover Chapter 13 in Texas specifically.
Chapter 13 bankruptcy allows the debtor to keep his or her property and repay debt over a period of three to five years. Chapter 13 in Texas rules follow those set by Congress. If you have disposable income after subtracting monthly living expenses, Chapter 13 is more beneficial than filing Chapter 7 bankruptcy. Once you have filed bankruptcy, creditors are prohibited by law from contacting the debtor.
Typically, a repayment plan is proposed by the debtor and must be approved or confirmed by the courts and all creditors in Chapter 13 in Texas bankruptcies. A monthly payment is made to the court trustee who distributes the agreed upon amount to each creditor. If at the end of the three or five year period, there are remaining outstanding balances, they will be discharged. This means the debtor is no longer financially liable.
Chapter 13 in Texas bankruptcy laws do have exceptions to the types of debts that can be discharged. Non-dischargeable debts will have to be paid in full when the repayment period has ended if a balance remains.
The following is a list of non-dischargeable debts according to Chapter 13 in Texas bankruptcy rules:
- Arrearages in child support or alimony.
- Debts incurred through a DUI conviction resulting in injury or death.
- Student loans.
- All fines and penalties for breaking the law, including traffic citations.
- All tax debts including income tax.
- Any debts not listed in the repayment plan, unless the creditor(s) discover you have filed bankruptcy.
Chapter 13 in Texas bankruptcy law also requires you continue to pay all mortgage and vehicle payments in order to keep the property. This rule applies to all secured debt, meaning tangible property secured through a loan.
Chapter 13 in Texas bankruptcies can be filed any time. There is no waiting period between filings as there is with Chapter 7. It is highly advisable you contact a bankruptcy lawyer to handle the case for you to ensure proper representation.