Best Bankruptcy Lawyers in Texas

About Bankruptcy Law in Texas, United States

Bankruptcy is a legal process in the United States that helps individuals and businesses who are unable to repay their debts get a fresh financial start. In Texas, as in other states, bankruptcy is governed mainly by federal law under the U.S. Bankruptcy Code, but there are specific state exemptions and local rules that also apply. Filing for bankruptcy does not mean you will lose everything you own; rather, it can provide protection from creditors, stop collections, and prevent foreclosures or repossessions in many cases. Depending on your circumstances, you may file for Chapter 7, Chapter 13, or, for businesses, Chapter 11 bankruptcy. Each chapter has specific requirements and implications for your property and debts.

Why You May Need a Lawyer

While individuals are allowed to file for bankruptcy without legal representation, having a lawyer can be vital in several situations. A bankruptcy attorney guides you through complex paperwork, ensures you understand your rights and obligations, helps you choose the best type of bankruptcy for your situation, and represents you in court proceedings. You may need a lawyer if:

• You are being harassed by creditors or facing lawsuits or wage garnishment
• You are at risk of losing your home to foreclosure or your car to repossession
• You have valuable assets or income that you want to protect
• Your financial situation is complicated, or you own a business
• You are unsure which bankruptcy chapter to file under or how bankruptcy will affect your property and debts
• A prior bankruptcy filing was dismissed or did not achieve the intended result

Local Laws Overview

Texas bankruptcy cases are filed in federal court, but Texas law provides certain exemptions that can significantly affect the outcome. These exemptions determine what property you are allowed to keep. Texas is well known for its generous homestead exemption, which may allow you to keep your primary residence regardless of its value. Other significant Texas exemptions include protections for personal property such as vehicles, household furnishings, and retirement accounts. Texas allows debtors to choose between the federal and state exemptions, depending on which is more beneficial.

Bankruptcy courts in Texas are organized by federal district, with distinct procedures and local rules in place. Residents must comply with federal bankruptcy law, local court rules, and state exemption statutes. Additionally, Texas law impacts certain debts, such as spousal maintenance, child support, and certain types of tax obligations, which generally cannot be discharged in bankruptcy.

Frequently Asked Questions

What types of bankruptcy are most common for individuals in Texas?

For individuals, Chapter 7 and Chapter 13 are the most common types. Chapter 7 liquidates non-exempt assets to pay creditors, while Chapter 13 involves a repayment plan over three to five years.

Will I lose my home if I file for bankruptcy in Texas?

Texas has a very broad homestead exemption that may allow you to keep your primary residence, provided you meet certain requirements and are current on your mortgage.

How does filing for bankruptcy affect my credit?

Bankruptcy will significantly impact your credit score and may stay on your credit report for up to 10 years. However, rebuilding credit is possible over time.

Can I keep my vehicle if I file for bankruptcy?

Texas allows an exemption for one vehicle per licensed household member, subject to certain limits. If your vehicle exceeds the value of the exemption, you may need to pay the difference or surrender it.

Are all debts eliminated in bankruptcy?

No, some debts such as alimony, child support, certain taxes, and most student loans cannot be discharged in bankruptcy.

How long does the bankruptcy process take in Texas?

A Chapter 7 case typically takes about three to six months from filing to discharge. A Chapter 13 repayment plan lasts three to five years.

Can filing for bankruptcy stop foreclosure or repossession?

Yes, an automatic stay goes into effect when you file for bankruptcy, temporarily stopping foreclosure, repossession, and most collection actions.

Do I have to attend court if I file for bankruptcy?

You will likely need to attend a meeting of creditors (Section 341 meeting), but most individuals do not need to attend a formal court hearing unless there are objections or complex issues.

How much does it cost to file for bankruptcy in Texas?

Filing fees for Chapter 7 are around $338 and for Chapter 13 around $313, excluding attorney fees, which may vary depending on your case complexity.

Can I choose between Texas and federal exemptions?

Yes, Texas residents can elect to use either Texas state exemptions or federal exemptions, depending on which offers greater protection for their property, but not a combination of both.

Additional Resources

If you are considering bankruptcy or need more information, these resources can be helpful:

• United States Bankruptcy Court for the Northern, Southern, Eastern, and Western Districts of Texas
• Texas RioGrande Legal Aid for free or low-cost legal assistance
• State Bar of Texas Lawyer Referral Service
• Texas Law Help, an online resource for general legal information
• Local Legal Aid offices and nonprofit consumer credit counseling agencies

Next Steps

If you believe bankruptcy may be the right choice for you, or if you have questions about your legal options, consider the following steps:

• Gather financial documents, including income, debts, assets, and expenses
• Consult a qualified bankruptcy attorney in Texas to review your situation and discuss your options
• Consider attending a free legal clinic or seeking help from a legal aid organization if you cannot afford a lawyer
• Be cautious about private debt relief or consolidation schemes that are not backed by a reputable agency or attorney
• File your petition in the appropriate federal bankruptcy court with all necessary documentation and required fees