Bankruptcy Requirements in Texas
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Filing for bankruptcy falls under federal laws, but for the state of Texas there are additional requirements that you may need to meet, as well as exemptions that apply strictly to residents of the state. Below are listed some of the unique requirements for filing for Chapter 7 bankruptcy in the state of Texas.
Credit Counseling – Debt Education Courses
Before the courts will allow you to apply for Chapter 7, they require that all bankruptcy filers attend credit counseling courses at an agency that is court approved. Upon completion, a certification will be issued which then will be filed along with your Chapter 7 bankruptcy paperwork, and presented to the court. This certificate will validate to the courts that you did complete a 180 day course successfully.
You will then be allowed to file for Chapter 7 bankruptcy, and once that is done you will then be required to attend another course that will revolve around debt education. The Debtor Education Course is available in English and Spanish, and is part of the new requirements of the amended laws introduced in 2005. It requires you to complete this course successfully, whereby you’ll be issued a post-filing bankruptcy certificate, and then receive your bankruptcy discharge from the courts. The course is considered a “no fail” course as no test will be given.
Means Testing in Texas
In Texas, you will need to undergo a means test. This will compare your income with the median household income in Texas, in relation to the size of your household. You will be eligible to file for Chapter 7 if your current income falls below the median income level. Should your income be above the median, you will be allowed to deduct payments and expenses from secured debts, in order to try and qualify.
In Texas the median income for a single person is currently set at $39,673. For a married couple with 1 child the median is $57,825. Consulting with a Texas bankruptcy attorney will help you to understand the different median levels that are available, and ensure that you are deducting all eligible expenses that will give you the best outcome.
The state of Texas allows a wide range of exemptions in a number of different categories. You will be able to claim housing costs, food and childcare. How you list the expenses may vary according to the payment being made. For instance, with vehicle payments the amount will be pre-set, but can vary by the region or county you live in.
This is why it’s important to consult with a Texas bankruptcy lawyer in order to ensure the best outcome for your situation, and to ensure that every exemption is being used that will enable you to have a successful Chapter 7 filing.