Filing for Chapter 7 bankruptcy can provide a fresh start for individuals burdened with overwhelming debt. At J Gannon Helstowski Law Firm, we help Texans navigate the legal process with clarity and confidence. Here’s a comprehensive overview of how to qualify for Chapter 7 bankruptcy in Texas.

Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also called “liquidation bankruptcy,” allows individuals to eliminate most unsecured debts—such as credit card balances, medical bills, and personal loans. In exchange, some of your non-exempt assets may be sold to repay creditors. Texas, however, offers generous exemptions that often protect most or all of your property.

Key Qualifications for Chapter 7 in Texas

1. Pass the Means Test

The most critical requirement is the means test, which compares your income to the median income for a household of your size in Texas. If your income is below the median, you automatically qualify.

If your income is above the median, further calculations consider your expenses and disposable income. If your disposable income is too high, you may need to consider filing under Chapter 13 instead.

2. Income Documentation

You’ll need to provide at least six months of income documentation. This includes:

• Pay stubs
• Tax returns
• Profit and loss statements (if self-employed)

This information is used to assess your eligibility and support your bankruptcy filing.

3. Complete Credit Counseling

Before filing, you must complete a credit counseling course from a government-approved agency. This session must be completed within 180 days prior to filing.

4. No Recent Bankruptcy Discharges

You cannot qualify for Chapter 7 if:

• You received a Chapter 7 discharge within the past 8 years.
• You received a Chapter 13 discharge within the past 6 years.

5. Non-Dismissal of a Recent Bankruptcy Case

If you had a previous bankruptcy dismissed in the last 180 days for willful failure to appear in court or comply with court orders, you may be temporarily barred from filing.

Texas Exemptions Protect Property

Texas has some of the strongest property exemptions in the country. Many filers keep:

• Their home (homestead exemption)
• Personal vehicles (up to a certain value)
• Personal belongings, including clothing and furniture
• Retirement accounts and pensions

This means you may be able to eliminate debt without losing your assets.

Final Steps with Legal Support

Once you’ve determined eligibility, filing involves preparing detailed financial paperwork, submitting forms to the court, attending a 341 meeting of creditors, and complying with all trustee requests. Errors or omissions can delay or derail your case.

Working with a legal professional ensures you understand your rights, file correctly, and avoid potential pitfalls. At J Gannon Helstowski Law Firm, we are committed to guiding Texans through the Chapter 7 process with care and precision.