Texas Bankruptcy Law Tips For Individual Debtors & Consumers

Texas bankruptcy laws are poised to change in reaction to increasing financial strain experienced by state residents. On August 18, 2003, the Administrative Office of the U.S. Courts issued a press release declaring "Bankruptcy cases continue to break federal court caseload records - total bankruptcy filings and non-business filings hit highs." The filing rate for Texas bankruptcy cases during 2003 increased 10.4% in the Northern District (Dallas) and Southern District (Houston) over 2002. Filings in the Western District (San Antonio, Austin and El Paso) increased 9.3%. Filings in the Eastern District (Tyler) increased 7.2%. Chapter 7 and Chapter 13 accounted for 98.6% of Texas bankruptcy cases filed in 2003. Statewide, only Chapter 11 case filings decreased, accounting for 1.3% of total volume of all Texas bankruptcy cases.

Current Texas bankruptcy laws allow for the full & final discharge of debts in Chapter 7. Chapter 13 combines past due amounts into one monthly payment, at reduced interest, for up to five years. Additionally, partial payments are available which discharge remaining balances at the end of the plan term. The maximum payment in Chapter 13 is determined based on net income after paying living expenses. In ether chapter, all Texas bankruptcy cases are subject to court review. Also be aware that Texas bankruptcy courts may set a hearing if an objection is filed by a trustee, creditor, party in interest, or upon their motion. After all objections are resolved to the satisfaction of the court, discharge of debts or confirmation of the plan is mandatory. Conversely, if objections are not resolved, cases are usually dismissed. Most often, the success of each case is determined by careful planning before selecting chapter, options and filing date.