Filing for Chapter 7 in Texas: Differences and Similarities

Filing for Chapter 7 bankruptcy in Texas might, at first, seem like a carbon-copy of the process in other states, but the Texas bankruptcy codes have unique components that must be understood before a filing of this nature can be undertaken. There are many similarities in the process, so one shouldn’t be afraid that a decoder of some sort will be necessary.

Understanding Texas Bankruptcy Code

The first thing to understand about bankruptcy code is that it is federal, meaning that it applies across all of the states uniformly. Any minor differences in Texas bankruptcy code will be just that: minor. There are larger, federal statutes in place to prevent just the sort of confusion that someone filing for bankruptcy in Texas would be looking to avoid.

Texas bankruptcy exemptions are some of the more generous in the United States, allowing those who file a greater range of asset protections, even in the face of their filing. For example, those who file can keep their homes, no matter the value of their property. This is a huge boon to anyone concerned about the well-being of their family in relation to where they live and the property that they call home.

In addition, those filing for bankruptcy in Texas who possess a driver’s license can protect the equity of their car, preventing repossession or punitive measures to their insurance. In fact, due to the comparatively generous exemption clauses in Texas, it is more likely than not that a filer will be able to keep the majority, if not all, of his or her property.

That said, filing in Texas is no cakewalk. Due to the reforms in the process that took place in 2005, those seeking Chapter 7 bankruptcy protection must deal with something called the means test. The test was designed to make it more difficult for a person to file for bankruptcy in Texas when they possess disposable income. Those earning more than the average for the state have to pass the test in order to file.