State Laws

Texas Bankruptcy Laws

     

Texas Bankruptcy Basics
Texas has two different types of bankruptcy for consumers who cannot find their way out of debt in a maximum of five years. Other types of bankruptcy are available for family-owned farms and business corporations. Not all those who apply for bankruptcy are granted bankruptcy from the court.

Chapter Thirteen bankruptcy can be re-filed any time after the entire process has been completed. Chapter Seven bankruptcy cannot be re-filed until six years has passed after the date of the first bankruptcy's completion. A husband and wife may petition for bankruptcy in a joint petition or a single individual may petition for bankruptcy on his or her own.

Chapter Thirteen Bankruptcy
Chapter Thirteen bankruptcy includes the relieving of debts through personal income. Those that qualify for this chapter of bankruptcy will have a repayment plan personally created for them by the court. The court will evaluate how much income is possible and how much debt is present.

A payment plan will then be created for how much is necessary to be paid each month in order to have the debt paid off in no more than five years. At times, based on the income and the debt amount, the debt can be paid off in three years.

Chapter Seven Bankruptcy
Chapter Seven bankruptcy is designed to eliminate debts through the sale of personal property and assets. The court will assign a trustee to the case. He or she will evaluate the values of the property and will liquidate all the non-exempt property. This property is whatever assets are not necessary to daily life.

The compensation will then be used to pay off creditors. Before all the creditors are paid, the trustee will be paid through the compensation made. The entire Chapter Seven bankruptcy process can be completed in six months.

Texas Bankruptcy Exceptions
Chapter Seven bankruptcy calls for the liquidation of non-exempt property. Texas has set the kinds of property that are noted as exempt into different asset categories. These categories include personal property, homestead, insurance, pension, miscellaneous, tools of trade, public benefits, and wages.

Each category includes various exemptions at different values. Generally each property is required to be under a certain amount in order to be deemed exempt.

Homestead assets can include one acre of property in town, one hundred acres out of town boundaries, and proceeding sales after six months. Personal property assets can include health aids, burial plots, food, jewelry with values under the twenty-five percent exemption, two horses, heirlooms, sports equipment, and motor vehicles.

Insurance assets can include Texas state college employee benefits, life, health, church benefits plan benefits, accident benefits, and retired public school employees. The entire miscellaneous asset category includes business partnership property. Pension assets can include judges, firefighters, police officers, county employees, district employees, and teachers.

Public benefits include workers' compensation, medication assistance, crime victims' award, unemployment compensation, and public assistance. Wages include earned yet unpaid wages and commissions up to seventy-five percent that are yet to be paid. Tools of trade assets include framing equipment, tools, ranching vehicles, boats, and books.

See also:
Texas Gun Laws
Texas Divorce
Texas DUI Laws
Texas Gun Laws External link (opens in new window)
Texas Misdemeanor External link (opens in new window)
Texas Expungement External link (opens in new window)