Texas Bankruptcy Law

Bankruptcy is a federal legal proceeding in which an individual who cannot pay his or her bills can get a fresh start. In Texas , bankruptcy protects consumers against lawsuit from creditors, but that protection doesn't start until after you've undergone the mandatory credit counseling session required by the new bankruptcy laws. Until your case is filed with the courts, your lender can continue foreclosure proceedings and credit card debt creditors can still attempt to collect your debts from you. The state of Texas is divided into four bankruptcy districts: Texas Eastern bankruptcy court, Texas Northern bankruptcy court, Texas Southern bankruptcy court, and Texas Western bankruptcy court.

Find a Bankruptcy Lawyer in Texas with our debt relief directory and get a free BK evalution for a loan modification, chapter 7, 11, 13 or debt settlement that could lead to a fresh start. Find out from a local attorney if bankruptcy is the best for your situation.

Chapter 7 is known as "straight" bankruptcy or "liquidation." It requires a debtor to give up property, which exceeds certain limits called "exemptions", so the property can be sold to pay creditors. Chapter 13, also called "debt adjustment", requires a debtor to file a plan to pay debts (or parts of debts) from current income. In Texas , most people file under Chapter 7 or Chapter 13. Either of these chapters may be filed individually or by a married couple filing jointly. Chap 11 BK, which is known as "reorganization", is used by businesses and a few individual debtors whose debts are very large. Chapter 12 reserved for family farmers.

Texas Bankruptcy Exemptions
According to the TexasBankruptcyLaw.com site, you have the choice of using the federal exemption statues or Texas state exemptions. According to the Lawyers.com website, the following is what you can keep under the federal exemptions.

• Your home, including co-op or mobile home, to $20,200
• Life insurance payments for person you depended on, needed for support
• Life insurance policy with loan value, in accrued dividends or interest to $10,775
• Unmatured life insurance contract, except credit insurance policy
• Alimony, child support needed for support
• Pensions and Retirement Benefits, ERISA - qualified benefits needed for support
• $525 per item in any household goods up to a total of $10,775
• Health Aids
• Jewelry to $1,350
• Lost earnings payments
• Your motor vehicle to $3,225
• Personal injury compensation payments to $20,200, wrongful death payments, crime victims'compensation, public assistance, social security, unemployment compensation, and veterans' benefits
• Tools of trade up to $20,200
• Wild Card - $1,075 of any property plus up to $10,125 of any amount of unused homestead exemption

And according to Lawyers.com, if you choose the Texas exemptions, you generally can keep:

• Your home, if not more than 10 acres in town or 100 acres out of town (200 acres for families)
• $30,000 worth of personal property ($60,000 for head of family), including one two-, three- or four-wheeled vehicle; two horses, mules or donkeys and a saddle, blanket and bridle for each; 12 head of cattle,; 60 head of other livestock; 120 fowl; pets. Athletic and sporting equipment, home furnishing, family heirlooms; food and clothing; jewelry (but not to exceed 25 per cent of total exemptions); tools of your trade
• Burial plots
• Health aids
• Unemployment, disability, veterans', workers' compensation and social security benefits
• Alimony and child support
• Retirement plan and life insurance proceeds
• Business partnership property
• Farming or ranching vehicles and implements

NOTE: These are the major bankruptcy exemptions. Check with your bankruptcy lawyer for a full exemptions list.

New Bankruptcy Law Changes - Outlines major changes you should know about in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), also known as the new bankruptcy laws.

This is important! The new bankruptcy law requires all debtors to fulfill two education requirements: a credit counseling course prior to filing and a financial management course before obtaining a discharge. Failure to complete either of these courses and file the appropriate certificates with the court will prevent a successful bankruptcy. The Chapter 13 Trustee will offer the required courses to Chapter 13 debtors, but Chapter 7 debtors are required to take the courses on their own.

Find a U.S. Trustee Approved Pre-Bankruptcy Counseling Provider and Post-Filing Debtor Education Provider.