Texas Bankruptcy Laws

Although bankruptcy cases are brought before federal court, each state has their own adaptation of the bankruptcy rules. This article will address Texas bankruptcy laws and how they may help you get out from under overwhelming debt.

The Texas bankruptcy laws offer the strongest property protection for debtors than any state in the country. Filing Chapter 7 bankruptcy in Texas is a good option for those who have a huge amount of unsecured debt. In many cases, unsecured debt can be completely discharged. The good news for debtors is Texas bankruptcy laws offer more exemptions from sale. Chapter 7 bankruptcy requires the sale of assets in order to pay off debt. With the broader exemptions from this rule it means you are able to keep more property than debtors in many other states.

Texas bankruptcy laws offer the following exemptions: the full value of your home, all of your wage earnings, the full value of one vehicle, up to $60,000.00 in personal property for a family and $30,000.00 for a single individual, all health aids and religious books. It is important to note retained vehicle value counts towards the respective personal property values. There are also limitations on land ownership: two hundred acres for a family living outside city limits, one hundred acres for an individual and ten acres for anyone living within city limits.

If you have a steady income, Chapter 13 may be the better option for you. This allows you to keep your property and offers an affordable interest free payment consolidation plan. The repayment period is usually three or five years. One monthly payment is made to the courts and is then distributed to your creditors. Oftentimes the amount of debt can be reduced through Chapter 13 bankruptcy. Once you have filed bankruptcy, creditors are prohibited from contacting you according to Texas bankruptcy laws.

Weigh your options when considering filing bankruptcy. You’ll want to look at income versus living expenses versus outstanding debt and your ability to pay. Also look at your assets. If you have few, you may want to file Chapter 7 bankruptcy. However, if you have property and items you do not want to lose, Chapter 13 may be the best option. Either way, consult a bankruptcy lawyer before making a decision.