Chapter 7 Bankruptcy Texas: 3 Things You Need to Know

If you're overwhelmed or don't understand what route, donate if you're dealing with debt. Therefore, we've written this guide to understand Chapter 7 bankruptcy in Texas. We've also outlined other alternatives that may be helpful. With that being said, here are few key things to consider before we get started:
Information in this article does not constitute legal advice, it is for informational purposes only, and may not constitute the most up-to-date information. Readers should contact their attorney for advice on any particular legal matter.
  1. Do you qualify for Chapter 7 bankruptcy, and if so, how much would you expect it to cost?
  2. Are there any other options to help manage your debt that may be more appropriate?
  3. What are the specifics about filing for Chapter 7 bankruptcy in Texas rather than another state?

In the following article, we'll answer all these questions and add more. However, if you prefer to get right to the point, we also offer a Chapter 7 Calculator. This will help you estimate your eligibility and the cost of filing. You can take the free Chapter 7 Bankruptcy Texas Calculator below:

1) How Chapter 7 Bankruptcy Works in Texas

How Fast Do You Get Relief in A Chapter 7 Bankruptcy in Texas

It usually takes around 120 days to wrap up a no-asset Chapter 7 case in the state from start to finish. A "no-asset" bankruptcy means you do not own valuable assets exceeding the Texas bankruptcy exemptions. Therefore, in most cases, you could be looking at a relatively speedy resolution to your bankruptcy case.

How Much Does It Cost To File Chapter 7 Bankruptcy in Texas

The cost for bankruptcy varies widely depending on a variety of factors. Some include location, your lawyer's expertise, and the difficulty of your specific case. Nationally, you can expect to pay anywhere from $500-$3,000.

However, even within Texas, prices can change drastically from city to city. For example, you can expect to pay around $1,600 in Nederland. In Dallas, however, prices could be closer to $2,642.

Regardless, there may be situations where this fee could be reduced with the help of a filing fee waiver. To learn more about cases where this may apply, check out this article: Texas filing fee waiver.

How Do I Qualify For Chapter 7 Bankruptcy in Texas?

When reviewing whether you qualify for Chapter 7, you may want to check the Chapter 7 Bankruptcy Texas Income Limits. This test determines if you're eligible for a bankruptcy discharge (another way of saying your debts will be forgiven). If you pass the means test (you can estimate it below), Chapter 7 will cover most of your unsecured debts. Unsecured debts don't have any collateral, nor do they include medical bills, personal loans, old utility bills, and credit card debts.

What about secured debts in Chapter 7?

If you want to wipe out secured debts such as car loans and mortgages, Chapter 7 bankruptcy might still be the answer. But the catch is that you'll have to give up as you'll be the creditor, and the creditor will consider it a full payment for what you owe.

IMPORTANT: Chapter 7 Qualification Texas Means Test

A tool to help you determine your eligibility for Chapter 7 bankruptcy in Texas is the Bankruptcy Means Test. This form will help calculate your average annual income based on your last six months of gross income. It will then compare that number to the median income of other households in Texas. If your median income turns out to be below the Texas median income, you might qualify for a Chapter 7 bankruptcy discharge.

Feel free to use the Chapter 7 Texas Bankruptcy Means Test below:

My Income Exceeded The Chapter 7 Means Test Allowable in Texas

If your income is higher than the median income in your state, you might need to dive into part 2 of the means test or explore an alternative option. We encourage you to check out this helpful resource: passing the Chapter 7 means test when income exceeds the median.

Chapter 7 Bankruptcy Texas Income Limits

If you're filing for bankruptcy you're on or after November 1, 2023, here are the limitations for income based on household size:

# of PeopleAnnual Income

Will I lose my belongings if I file Chapter 7 bankruptcy? Understand Texas bankruptcy exemptions.

When considering bankruptcy, another essential factor to think about is bankruptcy exemptions. These rules will allow you to safeguard assets that may be prone to possession by creditors.

Texas explicitly has an unlimited exemption for home equity—meaning you can shield your home, no matter the value. The motor vehicle exemption is similar since you can protect the value of one complete vehicle for every licensed household member.

Texas also has bankruptcy exemption rules regarding personal property. If you're a single adult, you have to shield up tyou'll000 worth of items, whereas if you have a family, that limit increases to $100,000.

Chapter 7 Bankruptcy Texas Pros and Cons


  • The speed at which you can receive a discharge: In just about 120 days, you could be debt-free and on your way to building a fresh start.
  • Property exemptions: If you meet the threshold, filing for Chapter 7 bankruptcy may allow you to keep most of your personal property.
  • Stopping debt collection lawsuits: Once you file, the court will issue an automatic stay, preventing legal action against you, including calls and letters from collectors.
  • Loan deficiency: When you owe more on a loan than the collateral is worth, you may be stuck with a deficiency. But with bankruptcy, that burden could be lifted.


  • Income requirements for qualification: To be eligible for Chapter 7 bankruptcy, you must meet specific income requirements.
  • Potential loss of home and belongings: If your assets exceed the exemption limit, there is a chance that you may have to part ways with some of your property.
  • Negative impact on credit report: Filing for Chapter 7 bankruptcy can have a lasting effect on your credit report. It stays on record for a decade, making securing future loans or favorable interest rates challenging.
  • Non-dischargeable debt: It's important to note that its debts may be discharged through Chapter 7 bankruptcy. Specific obligations, such as student loans and child support payments, are typically not eligible for discharge.

2) Alternatives to Chapter 7 Bankruptcy in Texas

a) Chapter 13 Bankruptcy in Texas

If you earn more than the income limit for Chapter 7 bankruptcy, there's still a way to get some relief through Chapter 13 bankruptcy. A Chapter 13 Bankruptcy in Texas allows you to restructure your debts into a more manageable monthly plan. This restructuring can help you keep your home and vehicles, help stop foreclosure, and prevent repossession of your belongings. Furthermore, you might be able to reduce any unpaid child support, alimony, and car loan payments.

Can you afford Chapter 13 bankruptcy?

If you are considering a Chapter 13 bankruptcy, you can use this calculator to help estimate whether you can manage the monthly payment.

b) Debt Settlement/Relief

Debt settlement may also be another option aside from Chapter 7 and Chapter 13 bankruptcy. Once you pursue this option, the debt settlement company negotiates a lower amount on your total debt, saving you money in the long run. However, consider its impact on your credit score and research correctly to choose a well-reputable and transparent debt settlement company.

c) Debt Management

Another option is debt management. Whereas debt settlement companies work to lower the total amount of debt you owe, debt management companies work to lower your interest rates. These programs usually last 3 to 5 years and are pricier than debt settlement. Not all creditors may be willing to work with a debt management company.

However, if you're dealing with a bunch of your interest credit card debt, this option may reduce that interest by around 10-20%. This could translate to an eventual 30-50% savings on the debt you currently owe and allow you to pay off these debts more efficiently. Considering your situation and determining which option makes the most sense financially is essential.

d) Debt Payoff Planning

The last alternative we'll mention is debt payoff planning. This strategy does take some effort and will require you to cut your expenses and save excess income to pay down as much debt as possible. However, you can make tangible progress every month by choosing the appropriate debt payoff plan. Another thing to remember is that as you begin to pay off your debts, you will be able to compound those payments towards the remaining debts, allowing you to pay things off faster and faster.


Now that we've covered the requirement, we've included Chapter 7 bankruptcy and alternative options for you; hopefully, you will feel more confident about your situation. Once again, if you want a quick estimate on your specific bankruptcy qualification and the possible costs, check out the Chapter 7 bankruptcy means test calculator below.

Lastly, although most people file bankruptcy with an attorney for simplicity, it can also be done independently. If you would like to skip the filing fees, which sounds like an option you might consider, we recommend reading the following article: filing bankruptcy without an attorney.

More News Stories

May 25, 2024
12 Bankruptcy Misconceptions You Must Stop Believing

Bankruptcy can be a great way to get a fresh start when your debt has become unaffordable due to financial hardship. Bankruptcy is for those who have a strong desire to pay their bills, but may not have the ability to pay those bills.

Read story
May 23, 2024
What Is Considered Income For the Bankruptcy Means Test?

Trying to figure out if you can meet all the requirements for a bankruptcy discharge can be a challenge, especially if you don’t know where to start. The Bankruptcy Means Test form was created to help you navigate through to see if you qualify to file for bankruptcy discharge. The means test will look at your income to determine if you can qualify.

Read story
May 22, 2024
Can You File Bankruptcy While Unemployed With No Job? Understand the process

Yes, you can file bankruptcy while unemployed with no job, but please note that your unemployment income does count as income for the bankruptcy means test.

Read story