Once you have decided to file for bankruptcy in Texas, you will need to file a petition to file for either Chapter 7 or Chapter 13 bankruptcy. Generally, a governmental trustee will be assigned to your case to oversee the bankruptcy process. To have your bankruptcy petition approved by the court, you will need to take the following steps.
First, before you file your petition, you must undergo credit counseling from an approved agency. This counseling is generally done online and will require a couple of hours of your time and approximately $100 per session. You must complete this counseling six months or less before filing your petition.
The agency will help you decide what type of bankruptcy to file for. If you decide to file for Chapter 13 bankruptcy, the agency can help you come up with a plan to repay your debts. Typically, you will have to start making payments in accordance to the payment plan no later than 30 days after you submit your petition.
You will need also to provide your trustee with detailed information about your debts, income, living expenses and assets. You may be asked to provide additional documentation if the trustee needs to verify the amounts you report.
Once your petition has been accepted, any creditors listed in your petition will be notified of the automatic stay on your account. This automatic stay will stop creditors from making any attempts to satisfy the debt you owe but take note that the automatic payments from your paycheck to pay 401k loans will continue. A few weeks after the notification letter is sent, the trustee will set up a 341 meeting for your creditors, during which you will have to answer questions relating to your bankruptcy petition and your repayment plan, if you have one. The trustee will also make sure you understand what it means to declare bankruptcy and confirm that you would like to proceed.
After the meeting, creditors can file an objection or do nothing and allow your petition to move forward. Creditors will have 60 to 90 days to file their objections. If your petition moves forward, the next steps will depend on whether you filed for Chapter 7 or Chapter 13 bankruptcy. If you filed for Chapter 7 bankruptcy, your assets will be liquidated and creditors will be paid. If you filed for Chapter 13 bankruptcy, the judge will have to approve your payment plan and you will begin making payments to your trustee. Once the payment plan is completed, the judge will likely discharge any debts leftover. You will also have to complete post-bankruptcy counseling in order to complete the bankruptcy process.