The First Step in Personal Bankruptcy - Eligibility Requirements


As of 2010, the economy appears to be improving for home owners and the unemployed. Many are taking advantage of this by reworking their assets. In many cases, debtors simply cannot afford to pay back debt from the time they were unemployed.

For some, including Texas residents, it's still tough. Taxable income decreased in the state between March of 2010 and March of 2009. And over 8 percent of Texas residents are unemployed. Many are falling into debt, some even losing their homes.

If this sounds like you--if you fear you'll lose your home, car, or other assets because of debt--you should consider the advantages of bankruptcy.

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The first step in filing Texas bankruptcy is to see if you're eligible.

How do you know if you're eligible? An experienced attorney can help, but so can this guide.

Eligibility for Texas Chapter 7

The eligibility for Texas bankruptcy depends on what form you want. For personal bankruptcy, you have Chapter 7 and Chapter 13. Even if you are self employed, you typically use these.

Eligibility also involves how many people are in your residence. The focus is yearly annual income. If you and your family make too much, you may not be eligible for chapter 7.

Texas Eligibility:
1 Person - Annual Income of$38,801
2 Residents - Annual Income of $55,660
3 Residents - Annual Income of $59,011
4 Residents - Annual Income of $66,145

It goes higher if you have a larger family. If you make more than these numbers, you are not eligible to file for Chapter 7 in Texas. If less, you are.

So what if you aren't eligible? It's not always a bad thing. Though Chapter 7 is good for discharging debts, Chapter 13 is very valuable as well. But are you eligible?

Eligibility for Texas Chapter 13

The Texas rules are created by federal law and the same in all states when concerning Chapter 13.

You're unsecured debts must be less than $360,475 and secured debts less than $1,081,400. That means you cannot go over either of those numbers in order to be eligible.

Why Chapter 7?

This form of personal bankruptcy is advantageous because you can discharge debts. While eligibility used to be common, under new Bankruptcy Code you have to make less than the annual income of your state--in our case Texas-- in order to be eligible?.

Why Chapter 13?

For Texas residents, foreclosures can be problematic. It's still high, even with the economy seeming to improve in some ways in 2010. Chapter 13 bankruptcy can save your home from foreclosure. It can also do things Chapter 7 does, such as stopping creditor harassment.

Where do you start? For Texas residents, you should hire an experienced attorney who specializes in this field. Find out your best options and plan for a fresh start.


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