How to Qualify to File Bankruptcy in Texas
If you are struggling in a sea of debt, bankruptcy can keep you afloat. Bankruptcy gives you the opportunity to wipe the slate clean or reconstruct your current payment obligations. Texas individuals can choose to file for either Chapter 7 or Chapter 13 bankruptcy. Although both types of bankruptcy help eliminate debt, the two are very different. There are certain requirements residents must meet to file bankruptcy in the state of Texas.
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Instructions
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Participate in credit counseling. According to the Federal Trade Commission, you must complete counseling 180 days prior to filing bankruptcy. In Texas, you are responsible for paying the cost to attend counseling.
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Meet the previous bankruptcy filing requirements. If you have declared bankruptcy in the past, you must wait at least eight years if you filed Chapter 7 and six years if you filed Chapter 13. If you submitted a petition for bankruptcy within the past six months, the case must not have been dismissed as a result of failing to appear at the hearing.
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Determine if your income exceeds the median income in Texas. If your income is not higher than the median income, you will be eligible to file Chapter 7 bankruptcy. You will need to calculate your combined monthly income (CMI). The CMI is the average of your gross monthly earnings during the six months prior to filing. You will need to use your CMI and number of members in your household to compare your income to the median income. For example, a single-earner cannot exceed $38,801 to file for Chapter 7 bankruptcy.
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Calculate disposable income. If your income exceeds the Texas median income, you can still file for Chapter 7 bankruptcy, provided your disposable income is not enough to pay a portion of your debt over time. You will need to subtract your debt from your CMI. Countable debt includes credit cards, childcare expenses related to work and child support payments. If you do not pass the test, you are still eligible to file for Chapter 13 bankruptcy.
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