The Pros and Cons of Filing a Chapter 7 Bankruptcy in Texas

April 12, 2023 By: Carrie Weir

Liberal Texas Exemptions Let You Keep Most Property | Your Bankruptcy Will Be a Matter of Public Record

With a Chapter 7 bankruptcy filing, as with almost everything in life, there are upsides and downsides. Ultimately, your decision comes down to weighing the benefits and the costs. Let’s look at how a Chapter 7 can help you, as well as some of the detriments of seeking to permanently discharge debts in bankruptcy.

The Positive Aspects of a Texas Chapter 7 Filing

There’s much to be gained in Texas with a liquidation proceeding under Chapter 7:

• You can permanently rid yourself of any financial obligation on most debts—exceptions include child support and spousal support obligations and most taxes. Student loan arrearages can also be difficult to discharge.
• You don’t have to give up all your property—Texas has among the most liberal property exemptions for bankruptcy in the country. In most instances, you’ll have minimal loss of assets (if any)
• Once you file, you won’t have to worry about bill collectors—the automatic stay prevents your creditors from calling, writing or taking any legal action outside of the bankruptcy proceeding to collect a debt
• All wages earned after your filing are protected—Creditors do not have access to any salary or wages you earn after your initial filing

What Are the Potential Negative Consequences of Filing for Protection under Chapter 7?

Here are some downsides to consider:

• You may not qualify for Chapter 7—you must first pass a “means test,” demonstrating to the court that you lack the resources to repay creditors over a 3-to-5-year period
• Your bankruptcy filing will be a matter of public record—Anyone can look it up, but the reality is that very few people do.
• Your credit will take a hit—The bankruptcy will appear on your credit record, though many creditors may view that as a good sign, showing that you’ve decided to take the necessary steps to get your finances in order

Contact an Experienced Rockwall, TX Bankruptcy Attorney

Make certain a Chapter 7 filing will provide the fresh start you need. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.