If you are dealing with overly burdensome levels of debt, you are not alone. Many families are struggling. The American Bankruptcy Institute (ABI) reports that 17,728 petitioners filed for bankruptcy protection in Texas in 2021. Of those, nearly two-thirds filed for Chapter 7 bankruptcy. Depending on your situation, bankruptcy may be the best path to a stable financial future.
Consumer bankruptcy is a complex, paperwork-intensive process. The sooner you get organized, the better position you will be in to solve your debt problems and find financial peace. In this article, our Frisco Chapter 7 bankruptcy lawyer provides a guide to the documents, records, and information that you need to file for Chapter 7 bankruptcy protection in Texas.
An Overview of the Documents and Records Needed to File for Chapter 7 in Texas
- Personal Identifying Information
To start, you should gather and organize some basic personal identifying information. You will generally need some personal identifying documents in order to file for Chapter 7 bankruptcy in Texas. Along with other personal identifying documentation, it is useful to gather:
- Your driver's license or other government issued ID; and
- Your Social Security card.
- Income Documents (Means Test)
Did you know that not everyone is eligible to file for Chapter 7 bankruptcy in Texas? In 2005, major reforms were made to the U.S. Bankruptcy Code. A “means test” was put into place that restricts who can file for Chapter 7 bankruptcy. As explained by the U.S. Department of Justice (DOJ), a Chapter 7 bankruptcy petitioner must provide comprehensive income records to prove that they satisfy the means test. Otherwise, their petition for bankruptcy relief under Chapter 7 may be denied. To qualify for Chapter 7 bankruptcy in Texas, you must have a below median income for the State of Texas, when adjusted for the size of your household. In the event you are above the median income, you may still qualify with certain allowable deductions. The following documentation must be provided:
- At least six months of pay stubs; and
- Your most recently filed federal income tax return.
Note: If you did not save a copy of your tax return, you can request an official transcript from the Internal Revenue Service. The IRS will provide you with the last three tax transcripts free of charge.
- Other Financial Records (Assets)
Beyond gathering and organizing financial documents related to your income, you should also be prepared to provide financial information about your assets. You may or may not be required to provide this information along with your Chapter 7 bankruptcy filing. A Frisco, TX consumer bankruptcy lawyer will help you determine what needs to be shared and when. That being said, you should gather and organize financial records as soon as possible. You may need:
- Bank statement;
- Investment account statements;
- Retirement account statements;
- Business records; and
- Home/mortgage records.
- Credit Counseling Certificate
You must complete a Department of Justice approved credit counseling course in order to file for Chapter 7 bankruptcy in Texas. As described by the United States Bankruptcy Court for the Eastern District of Texas, a Chapter 7 bankruptcy petitioner must attend and complete credit counseling “within six months before they file.” If you have already completed credit counseling, make sure you save your certificate and file for bankruptcy within 180 days of the date of completion. If you have not yet attended credit counseling, you will need to do so.
- A Record of Your Debts
A Chapter 7 bankruptcy is also known as a straight bankruptcy or a liquidation bankruptcy. A successful Chapter 7 consumer bankruptcy filing allows a petitioner to shed many—potentially all—of their unsecured debts—credit cards, pay day loans, medical debts. When you are preparing to file for Chapter 7, it is imperative that you have a clear record of all of the debts that you owe, including:
- Bills, including statements from creditors;
- Any notice of collection activities;
- Any lawsuits that have been filed; and
- A recent copy of your credit report.
As noted above, many debts are dischargeable through Chapter 7 bankruptcy. However, some financial obligations, such as back due child support, cannot be discharged. If you have any specific questions about which types of debts can be discharged through a Chapter 7 bankruptcy filing in Texas, contact our Frisco consumer bankruptcy lawyer for help.
- Monthly Expenses
Finally, it is also important to put together a comprehensive account of your current monthly expenses. Not only is this useful in the bankruptcy process itself, but a clear and comprehensive record of your current (and future) monthly expenses will help you determine if Chapter 7 bankruptcy is truly the best option. Along with other costs, monthly expenses include:
- Mortgage payment or rent payment;
- Auto loan payments;
- Utility bills, including phone and internet;
- Transportation costs including auto maintenance and tolls and parking;
- Child care costs; and
- Cost of food.
How a Texas Consumer Bankruptcy Lawyer Can Help
Dealing with debt can be stressful and overwhelming. At the same time, there are always legal options available to help you move towards a more secure and stable financial future. Our founding attorney Théda Page has extensive experience handling Chapter 7 bankruptcy cases in Texas. We are here to help you navigate the process and find the best path forward. Among other things, our Frisco personal bankruptcy attorney is prepared to:
- Answer questions during a complimentary initial strategy session;
- Review your financial situation to determine if Chapter is the right option;
- Gather and organize all of your documents, records, and financial information;
- Guide you through all of the Chapter 7 bankruptcy paperwork; and
- Take whatever legal action is needed to help you resolve your debt problems.
Contact Our Frisco, TX Chapter 7 Bankruptcy Attorney Today
At The Page Law Firm, our Frisco bankruptcy lawyer has the skills and experience to help you move forward and create a better financial future. If you have any questions about what you need to do to file for Chapter 7 bankruptcy, we can help. Give us a call at (214) 618-2101 or contact us online to set up your complimentary, confidential strategy session. With an office in Frisco, we provide Chapter 7 bankruptcy representation in Denton County, Collin County, and throughout North Texas.