Qualifying for Chapter 7 Bankruptcy Relief in Texas

 Posted on October 11, 2023 in Chapter 7

For Texas consumers overwhelmed with massive amounts of unmanageable debt, filing for Chapter 7 bankruptcy can provide the fresh start and financial relief they desperately need. However, you must meet certain specific criteria to legally qualify for the full debt elimination available through Chapter 7 in Texas. A Texas lawyer can help you navigate through the Chapter 7 bankruptcy process.

Satisfying the IRS Means Test

One of the main qualifying requirements involves passing the rigorous “means test” enforced by the IRS. This required test looks at your current monthly income levels and compares them to the median income averages for a Texas household of your size. You satisfy the means test if your income falls below those median thresholds based on Texan household size. The IRS adjusts these median income levels annually.

Ensuring Proper Types of Dischargeable Debt

Chapter 7 bankruptcy works best for permanently eliminating unsecured debt obligations like personal credit card balances, uncollateralized loans, medical bills, utility expenses, and other debts not tied to an underlying asset. Any debts secured by property, such as mortgages, car notes, or IRS tax arrears, generally cannot be discharged through Chapter 7. An attorney can advise which debts may be eliminated.

Abiding By Time Limits Between Filings

You cannot receive a Chapter 7 discharge of all dischargeable debts if you have filed for bankruptcy protection within the previous eight years. There are also limits if you previously filed for Chapter 13 bankruptcy. The waiting period is reduced to four years before becoming eligible again for Chapter 7 relief.

Completing the Credit Counseling and Education Courses

All individuals filing for Chapter 7 bankruptcy relief in Texas must complete approved credit counseling and debtor education courses prior to having their qualifying debts successfully discharged through the Chapter 7 process. These courses can be completed online.

Full, Honest Disclosure of All Financial Information

Filing for bankruptcy requires full, honest disclosure detailing all assets, debts, sources of income, and expenditures. Intentionally hiding assets and liabilities or submitting inaccurate information can result in your case being dismissed and discharge denied. Your attorney helps handle required filings precisely.

Contact a New Braunfels, TX Bankruptcy Attorney

If you feel like you may qualify and are drowning in unsustainable debt that threatens your livelihood and future, a Boerne, TX bankruptcy lawyer can help. You deserve a fresh start and to know what next steps you should take. Call Law Offices of Chance M. McGhee at 210-342-3400 to start with a free consultation.