The process and regulations for filing bankruptcy are governed by federal law, so the basic elements of filing are similar in every state. At Daic Law, we are commonly asked about the process of filing for bankruptcy, with the variety of questions as unique as the individuals asking. Here is our top list of frequently asked questions about bankruptcy in Texas to help our readers learn more.
Frequently Asked Questions about Bankruptcy in Texas
Q: What types of bankruptcy are there?
A: The different types of bankruptcy are classified by Chapter, such as:
- Chapter 7: Personal bankruptcy allowing the debtor (person filing) to liquidate (sell) assets in order to pay debts. Also called “straight” bankruptcy.
- Chapter 11: Mostly used by businesses, Chapter 11 reorganizes debts of businesses or individuals with a lot of debt.
- Chapter 12: Restricted to family farmers.
- Chapter 13: Allows the debtor to create a plan for repaying debts based on current income.
Q: Which type of bankruptcy should I choose?
A: The type of bankruptcy that is right for you will depend on your individual situation. The two most commonly filed forms of bankruptcy are Chapter 7 and Chapter 13. To decide which option is best for you, contact a bankruptcy attorney to discuss your financial situation.
Q: Where do I file bankruptcy?
A: Bankruptcies in Texas are filed in one of four U.S. bankruptcy courts in the state. Depending on where you live, you will file bankruptcy in:
- Northern District: Including Amarillo, Dallas, Fort Worth, and Lubbock.
- Southern District: Including Houston, Galveston, Laredo, and Corpus Christi.
- Eastern District: Including Tyler, Plano, and Beaumont.
- Western District: Including Austin, San Antonio, El Paso, and Waco.
Q: How much does bankruptcy cost?
A: The fees for filing bankruptcy may vary depending on your attorney. There are standard fees dictated by the court, but every attorney has different fees for preparing and filing documents.
Q: Will I lose my home or car if I file bankruptcy?
A: In Texas, filing bankruptcy allows exemptions, which are items or property that cannot be included in the filing. In most cases, your home, car, and necessities will not be included. If you are making payments on a home or car loan, you will still be liable for these debts after filing bankruptcy.
Q: Will I have to go to court during bankruptcy?
A: Yes and no. Most people filing bankruptcy only have to attend a “meeting of creditors”, which is a meeting attended by you, the bankruptcy trustee, and creditors, if applicable. You will be asked a few simple questions, and will be allowed to dispute debts if you choose. Disputed or complicated cases may require resolution before a judge, in which case you would get a notice for a court appearance.
Q: Do I need an attorney?
A: The simple answer is: Yes! Because filing bankruptcy has an affect on your finances, credit, and lifestyle, you want to make sure the process is managed in your best interests. Having an attorney by your side can help ensure that your rights are protected and you get the best outcome possible for a fresh start.