Qualifying for Bankruptcy in Texas

 Posted on August 14, 2019 in Qualifying For Bankruptcy

A bankruptcy can help by allowing you to discharge your debts and no longer be legally responsible for repaying those debts, giving you the chance to start over. This blank slate comes with a price, however. Filing for bankruptcy will affect your credit score and can make it harder to get future loans or credit cards. Nevertheless, for many people who are in financial trouble, there is no other way to remedy the situation but to file for bankruptcy. There are two types of bankruptcies that are commonly filed by individuals in the United States -- Chapter 7 bankruptcy and Chapter 13 bankruptcy. Each type of bankruptcy has its own way of helping those who are in insurmountable debt, with Chapter 7 bankruptcy discharging most or all of your debts and Chapter 13 reorganizing your debts into more manageable monthly payments. Qualification requirements also vary depending on the type of bankruptcy you choose to go with.

Chapter 7 Bankruptcy

The idea behind a Chapter 7 bankruptcy is that you do not have enough income to repay all of the debts that you owe. As such, most of your debts are discharged in a Chapter 7 bankruptcy. In 2005, bankruptcy laws changed to add income limits to qualify for a Chapter 7 bankruptcy. The past six months of your income will be used to determine whether or not you qualify for a Chapter 7 bankruptcy along with the number of people in your household. Generally, the income limits are as follows:

• Single person: $40,389
• 2-Person Household: $54,762
• 3-Person Household: $59,276
• 4-Person Household: $65,932
• Add $7,500 for each additional person over four household members

Chapter 13 Bankruptcy

Qualifying for a Chapter 13 bankruptcy is slightly different. A Chapter 13 bankruptcy will allow you to reorganize your debts and make affordable monthly payments over three or five years. Because you are still technically paying all or most of your debts, you must prove that you have regular income and a sufficient amount to pay those debts. Next, your debts must not be above the thresholds. Unsecured debts, such as credit cards and personal loans, must be below $394,725. Secured debts, such as a mortgage or auto loan, cannot be more than $1,184,200.

Unsure if You Qualify for Bankruptcy? Contact a San Antonio, TX Bankruptcy Attorney Today

Financial troubles are never easy to deal with, especially when you have to deal with a bankruptcy. If you believe that bankruptcy is the best course of action for your financial issues, your next move is to determine which type of bankruptcy you qualify for. At the Law Offices of Chance M. McGhee, we can help you determine which type of bankruptcy is right for your particular case. With help from a Boerne, TX bankruptcy lawyer, you can be sure that you are receiving helpful and accurate advice. Call our office today at 210-342-3400 to schedule a free consultation.

Sources:

https://www.experian.com/blogs/ask-experian/bankruptcy-chapter-7-vs-chapter-13/

https://www.creditkarma.com/advice/i/what-is-chapter-13-bankruptcy/