You may make a good income, but are unable to afford your debts, so you are looking at a Chapter 13 bankruptcy in Texas. Filing Chapter 13 is a big decision. You are committing to a bankruptcy repayment plan that could last for up to five years.
This is why understanding the bankruptcy differences and understand your Chapter 13 plan payment is crucial to making the most informed decision. Let’s get started.
Chapter 13 Verses Chapter 7 Bankruptcy
The types of bankruptcy can be confusing. Let me first explain the differences between Chapter 13 and Chapter 7. In short, Chapter 7 is often less expensive and faster, so it’s crucial that you understand what you are getting into.
Chapter 13 Bankruptcy in Texas
Some refer to Chapter 13 Bankruptcy as the ‘wage earners bankruptcy.’ This chapter is where debtors offset their loans through an installment repayment process, mostly with the assistance of their lawyers. This plan can last from three years to five years, and it is submitted monthly. Some people earn lots of money that hinders them from filing for Chapter 7, while others possess valuable possessions. These are some of the reasons why they are more eligible for Chapter 13 rather than Chapter 7.
Chapter 7 Bankruptcy in Texas
A Chapter 7 Bankruptcy is also known as a ‘liquidation bankruptcy.’ This kind of arrangement is handy when debtors can’t pay their debts, forcing them to enter this bankruptcy to be released from their obligation. Chapter 7 can be completed in as little as four months and it is less costly, but you have to be eligible. You have to qualify for Chapter 7 bankruptcy, which makes it more prohibitive.
Calculating Chapter 13 Plan Payments in Texas
Your Chapter 13 plan payment in Texas depends on your specific financial situation, which is why we build a free Texas Chapter 13 Plan Payment calculator below that you can use to estimate your Chapter 13 plan payment.
Factors used when calculating a Chapter 13 plan include, but are not limited to:
- Disposable Income — The amount of income you have each month after subtracting allowable payroll deductions and allowable living expenses from your gross monthly income.
- Assets — In some cases, the value of your assets could increase the amount of your Chapter 13 plan if your assets have large amounts of non-exempt equity. We discuss Texas bankruptcy exemptions in more detail below and how exemptions impact your Chapter 13 plan.
- Debts — Some debts must be paid in full through the Chapter 13 plan (priority unsecured debts such as taxes, alimony, child support, and administrative costs). Other creditors may receive partial payments, including unsecured debts, such as medical bills, credit card debt, and personal loans. Chapter 13 plans typically include back mortgage payments and car loan payments.
- Recent Financial Transactions — Some recent financial transactions could impact your Chapter 13 plan.
You can also explore detailed information about Chapter 13 by reading our article entitled “Chapter 13 Bankruptcy – Everything You Need to Know.”
Texas Means Testing
You may be wondering what goes into the Chapter 7 Means Test in Texas. The test considers Texas means testing data to give an estimate of whether someone is eligible for a Chapter 7. Also, we have included information for the Texas Means Test Data from May 15, 2021 inclusive in the table below. Please note that for families with more than 9 people in the household, you would add $9,000 for each additional household member.
| # of People | Annual Income |
|---|---|
| 1 | $52,953 |
| 2 | $71,287 |
| 3 | $77,110 |
| 4 | $89,196 |
| 5 | $98,196 |
| 6 | $107,196 |
| 7 | $116,196 |
| 8 | $125,196 |
| 9 | $134,196 |
Texas Bankruptcy Exemptions
Before filing for Chapter 13, you have to consider ownership of any assets above the exemptions. Although you might be eligible for a Chapter 7, having an equity position in assets makes filing for a Chapter 13 or debt settlement the better choice.
Texas has particular statutes and bankruptcy exemptions that should be factored in before filing for bankruptcy. If your assets are above the Texas exemptions, they could face liquidation. You can see below the highly common Texas bankruptcy exemptions, but the entire list can be found here.
Texas Chapter 13 Bankruptcy Trustees
It is the responsibility of the trustee to administer the bankruptcy case and liquidate the debtor’s non-exempt assets. You will find that Chapter 7 trustees are many, but Chapter 13 trustees are scarce. You can find the full list of Chapter 13 bankruptcy trustees in Texas here.
| District | Name | Phone |
|---|---|---|
| Eastern | Carey Ebert | (972) 943-2580 |
| Eastern | Lloyd T Kraus | (903) 593-7777 |
| Eastern | Chapter 13 Standing Trustee | (903) 594-7115 |
| Northern | Pamela A. Bassel | (817) 916-4710 |
| Northern | Lloyd T Kraus | (903) 593-7777 |
| Northern | Thomas D. Powers | (214)855-9200 |
| Northern | Tim Truman | (817) 770-8500 |
| Northern | Robert B. Wilson | (806)740-0114 |
| Southern | Cindy Boudloche | (361)883-5786 |
| Southern | William Heitkamp | (713)722-1200 |
| Southern | David G. Peake | (713)283-5400 |
| Western | Stuart C. Cox | (915)598-7674 |
| Western | G. Ray Hendren, Jr. | (512) 474-6309 |
| Western | Deborah B. Langehennig | (512) 912-0305 |
| Western | Gary W. Norwood | (432)686-9452 |
| Western | Mary Kathryn Viegelahn | (210) 824-1460 |
Texas Bankruptcy Districts and Court Locations
You will find 4 bankruptcy districts in Texas: Northern, Western, Eastern, and Southern. The following is a map of the Texas districts from the US bankruptcy courts (Source: Texas Almanac)
Now that you are knowledgeable regarding the districts let’s look at the specific courts you can go to for a Chapter 13 Bankruptcy in Texas. Below is the court websites that by the district above.
- Northern District of Texas Bankruptcy Courts
- Eastern District of Texas Bankruptcy Courts
- Western District of Texas Bankruptcy Courts
- Southern District of Texas Bankruptcy Courts
Should I pursue a Chapter 13 Bankruptcy in Texas?
In Texas, a Chapter 13 bankruptcy is an accepted option for people facing debt hardships and aren’t eligible or don’t want to pursue a Chapter 7. You can also look at other options and their cons and pros, including debt management and debt settlement. Our Chapter 13 Calculator compares the choices and provides the benefits and drawbacks and will estimate your Chapter 13 Repayment Plan. Therefore, you can use the calculator to conduct personal research or as a resource. Debt can be a source of continual stress, and we believe that this article will be instrumental in assisting you to become debt-free.
