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What Is a Chapter 20 Bankruptcy?
You've probably heard of Chapter 7 and Chapter 13 bankruptcy. But there's a third strategy that combines both, and it goes by an unofficial name: Chapter 20 bankruptcy. It's not a real chapter in the bankruptcy code. But it is a real strategy that Texas residents use to get out from under debt that Chapter 7 and Chapter 13 can’t solve on their own.
If you’re interested in filing for bankruptcy and wondering what the best approach for your case might be, our San Antonio bankruptcy lawyer can help.
What is "Chapter 20" Bankruptcy?
Chapter 20 bankruptcy isn’t a real legal term. Instead, the name comes from simple math: 7 plus 13 equals 20. Courts and bankruptcy attorneys across Texas recognize it as a possible option, even though you won't find it written in federal law. To understand Chapter 20, you need to understand what Chapter 7 and Chapter 13 do on their own, and why each one sometimes falls short of a real person’s needs.
Suing a Creditor in Bankruptcy
Most people think about bankruptcy as a purely defensive process. You file for bankruptcy, the process immediately offers certain protections, and eventually your debts are wiped out or affordably restructured. What many people don't realize is that bankruptcy also gives you real tools to go on the offense when creditors step out of line or when a debt's status is genuinely unclear.
If you are dealing with a creditor who won't follow the rules or a debt that isn't clearly covered by your discharge, you may have the right to sue that creditor directly in bankruptcy court. This might sound intimidating, but bankruptcy court is actually one of the most practical places to resolve these issues. You also already have a Texas bankruptcy attorney on your side who knows your situation and whether credit card companies are doing things they shouldn’t.
"Pre-Petition" and "Post-Petition" Debts in Chapter 13
If you are filing for bankruptcy in 2026, or if you are already in the middle of a Chapter 13 case, you may have heard the terms "pre-petition" and "post-petition" debts. These are legal terms that describe when a debt was created, either before or after you filed for bankruptcy. The difference is important in Chapter 13, because the two types of debts are treated very differently and it’s better to know what they are beforehand. Understanding how each type is handled can help you avoid surprises and make better decisions throughout your case.
If you have questions about Chapter 13 bankruptcy and how it works in Texas, call the Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation with a New Braunfels bankruptcy attorney.
What Does "Pre-Petition" Debt Mean in a Chapter 13 Case?
The word "petition" refers to the document you file with the bankruptcy court to officially start your case. A pre-petition debt is any debt you owed before you filed that petition. These are the debts your Chapter 13 repayment plan is built to handle.
Bankruptcy May Be Better Than Consolidation
When people feel like they’re drowning in debt, two options come up more than any other: debt consolidation and bankruptcy. Debt consolidation is heavily marketed as the responsible, respectable choice. It feels like the path that avoids the stigma of bankruptcy while still getting your finances under control.
But consolidation is not always what it promises to be. Many consolidation options amount to nothing more than a scam that can make debt problems even worse. For many people, bankruptcy is the smarter, faster and more honest path forward.
If you are considering filing for bankruptcy in Texas in 2026, our San Antonio consumer bankruptcy lawyer can help you work through your options without a sales pitch.
Surrendering a Vehicle in a Chapter 13 Case
If you are struggling to keep up with a car payment and considering bankruptcy in 2026, you have more options than you might think. Chapter 13 bankruptcy doesn’t just help you keep your car – it can also give you a structured and legally protected way to give one up without being buried in debt.
Our Boerne, TX consumer bankruptcy lawyer can help you understand how vehicle surrender and repossession work under Chapter 13 so you can make a smarter decision for your financial future.
What Is a Deficiency Balance?
When most people think about surrendering a car to a lender, they assume handing over the keys ends the financial relationship. Unfortunately, that is not usually how it works outside of bankruptcy.
Here is what actually happens. After you surrender a vehicle you can’t afford, the lender sells it, usually at a wholesale auto auction where prices run well below market value. Then they apply whatever they receive from that sale to your loan balance. Whatever is left over after the sale proceeds, plus the lender's fees for storage, transportation, and auction costs, is what you still owe. That remaining amount is called the "deficiency balance."
Creditor's Failure to File a Proof of Claim in Chapter 13
When you file for Chapter 13 bankruptcy, every creditor you list receives official notice of your case. They are then required to submit a document called a "proof of claim." This is a formal statement of what you owe and what kind of debt it is.
Creditors don’t always meet the deadline to submit a proof of claim. If you are filing for Chapter 13 bankruptcy in 2026, a creditor missing that filing window could have a real impact on your finances. In some situations, a missed proof of claim can even lower your monthly payments, reduce your total repayment, or even shorten how long you are in your plan. Our San Antonio Chapter 13 bankruptcy lawyer explains.
What Is a Proof of Claim in Chapter 13 Bankruptcy?
A proof of claim is the way a creditor tells the bankruptcy court that you owe them money and asks to be paid through your repayment plan. Under 11 U.S.C. § 501, creditors have the right to file this document, but they have to be proactive; it doesn’t happen automatically. Under Federal Rule of Bankruptcy Procedure 3002, most creditors have 70 days from the date of your bankruptcy filing to submit their proof of claim. If they miss that window, they generally receive nothing from your Chapter 13 case.
"Property of the Estate" Includes an Inheritance
Most people filing for bankruptcy in 2026 are focused on what they already owe and what they already own. An inheritance is probably the last thing on their mind. But if there is any chance you could inherit money or property in the months before or after you file, there are specific rules under federal bankruptcy law that you need to understand before you make any decisions about timing.
Getting this wrong can cost you far more than you expect. If you find out you’re going to receive an unexpected inheritance and you’re in the process of filing for bankruptcy, our Schertz, TX bankruptcy attorney can help.
What Is "Property of the Estate" in a Chapter 7 Bankruptcy Case?
When you file for bankruptcy, a legal concept called the "bankruptcy estate" is created the moment your case is filed. Everything you own at that moment becomes property of the estate. Under 11 U.S.C. § 541, this includes:
Preparing for Your Chapter 7 Bankruptcy 341 Meeting of Creditors
When you file for Chapter 7 bankruptcy, most of the process involves paperwork. But there are a few steps that require you to show up in person, on the phone, or on a video call. You will need to complete a financial education course before you file and another one after. You will also need to attend something called a 341 Meeting of Creditors.
For most people filing bankruptcy in 2026, the 341 meeting is the part they are most nervous about. But the meeting is almost always shorter and less stressful than people expect — especially when a San Antonio bankruptcy attorney helps you know what is coming. Here is everything you need to know to walk in prepared.
What Actually Happens at a Chapter 7 341 Meeting of Creditors?
First, you should know what the 341 meeting is not. It’s not a court hearing and there is no judge. You will not be sitting in a courtroom or being interrogated. In most cases, the meeting takes place in a simple conference room or over the phone and lasts about 15 minutes. It rarely goes longer than half an hour.
"Discovery" during a Nondischargeability Dispute with a Creditor
When a creditor challenges whether a debt can be wiped out in your bankruptcy case, the dispute does not get resolved overnight. There is a formal legal process that plays out in what is called an "adversary proceeding."
One of the most important stages of that process is something called "discovery." Understanding what discovery is, how it works, and what it means for your case can help you feel far less overwhelmed when you are in the middle of one of these disputes.
In 2026, these disputes remain one of the more difficult areas of consumer bankruptcy law. Having a friendly Kerrville, TX bankruptcy attorney with experience in this area makes a significant difference in how they turn out.
What Is a Nondischargeability Dispute and How Does It Start?
When you file for bankruptcy, most of your unsecured debts — credit cards, medical bills, and similar obligations — are eligible to be discharged, which means permanently eliminated. But a creditor who believes their particular debt should be an exception can file a formal complaint with the bankruptcy court challenging the discharge of that debt. This kicks off the adversary proceeding.
What Happens When You File for Bankruptcy and a Creditor Doesn’t Enforce a Lien?
Filing for bankruptcy in 2026 can feel like a huge weight lifted off your shoulders. Your debts are on the table, the court is involved, and the process has rules that protect you. But sometimes, one of those rules creates a situation that catches people off guard.
Let’s say a creditor holds a lien on your property, you file for bankruptcy, and then the creditor does nothing. No foreclosure. No repossession. No contact at all. So what happens to that lien? What happens to your property? And does ignoring the situation ever come back to bite you?
These are important questions and they all have answers that you need to know if you’re in this situation. Our San Antonio bankruptcy attorney has over 20 years of experience helping Texas families figure out exactly these kinds of complicated situations. We offer free consultations so you can get real answers before making any decisions. Call us today at 210-342-3400.
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