Overview: What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy offers individuals and sole proprietors a structured repayment plan to manage their debt over 3 to 5 years. It is especially useful for those who have steady income but need time to catch up on mortgage payments, stop vehicle repossession, or eliminate unsecured debt. Unlike Chapter 7, Chapter 13 allows you to keep your property while reorganizing your finances under court protection.

Wallace Law, PLLC serves clients across the Northern and Eastern Districts of Texas, including Dallas, Fort Worth, Plano, Arlington, Tyler, and the surrounding communities.

Who Qualifies for Chapter 13?

You may be eligible if you:
– Have regular income from employment, self-employment, or retirement
– Are behind on mortgage or vehicle payments and want to avoid foreclosure or repossession
– Have substantial tax debt or child support arrears
– Own non-exempt property you want to keep
– Do not qualify for Chapter 7 due to income or failed Means Test

Chapter 13 is also a valuable tool for sole proprietors and gig workers with business-related debt.

How Chapter 13 Works in Texas

1. Pre-Filing Preparation: We review your income, debts, expenses, and exemptions. Credit counseling is required before filing.
2. Filing the Petition: Includes detailed schedules of assets, liabilities, contracts, income, and a proposed repayment plan.
3. Automatic Stay: Once filed, all creditor actions are halted—foreclosures, garnishments, lawsuits, and collection calls must stop immediately.
4. Plan Confirmation: After filing, a plan confirmation hearing is held before the bankruptcy judge, usually within 30–60 days.
5. Monthly Payments Begin: You’ll make a single monthly payment to the court-appointed trustee, who distributes funds to creditors.
6. Plan Completion and Discharge: After 3 or 5 years (depending on your income), remaining dischargeable debt is wiped out.

Benefits of Chapter 13 Bankruptcy

– Stop Foreclosure and repay mortgage arrears over time
– Prevent Vehicle Repossession, reduce loan balances and interest (cramdown)
– Consolidate Tax Debt and repay over the life of the plan
– Avoid Wage Garnishment and lawsuits
– Protect Non-Exempt Assets you might lose in Chapter 7

Texas Bankruptcy Exemptions in Chapter 13

Although Chapter 13 allows you to keep all property, your repayment plan may depend on the value of your non-exempt assets. Texas exemptions include:
– Homestead: Unlimited equity in your primary residence (subject to acreage caps)
– Vehicles: One per licensed family member
– Personal Property: $50,000 (individual) / $100,000 (family)
– Tools of the Trade: $12,500 (individual) / $25,000 (family)
– Retirement Accounts and Wages: Fully exempt
Our attorneys ensure that your plan takes full advantage of these exemptions.

Debt Limits and Plan Duration

– Unsecured debt limit: $465,275 (as of 2025)
– Secured debt limit: $1,395,875
– 3-Year Plan: For debtors below Texas median income
– 5-Year Plan: Required for debtors above median income

Case Study: Fort Worth Family Saves Home from Foreclosure

A married couple in Fort Worth was $21,000 behind on their mortgage due to illness and missed work. Wallace Law filed a Chapter 13 petition that stopped the foreclosure sale and allowed repayment of the arrears over five years. They remained in their home, and all credit card debt was discharged upon plan completion.

Case Study: Self-Employed Driver in Lewisville Reduces Car Payment

A self-employed Uber driver in Lewisville was facing repossession on a high-interest auto loan. We used Chapter 13 to cram down the vehicle’s value, lowering the balance from $17,000 to $9,000 and the monthly payment from $615 to $345. The vehicle was saved, and his business remained operational.

Why Choose Wallace Law, PLLC?

– Decades of bankruptcy experience in the Northern and Eastern Districts of Texas
– In-depth knowledge of local trustee procedures and court expectations
– Custom, confirmable plans tailored to client needs and court standards
– Weekend and virtual appointments available
– Honest, compassionate guidance with aggressive legal protection

Proudly Serving

Dallas, Fort Worth, Plano, Arlington, Addison, Flower Mound, Lewisville, Denton, Richardson, Grand Prairie, North Richland Hills, DeSoto, Southlake, North Dallas, Highland Park, and Tyler.

Chapter 13 Bankruptcy

Overview: What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy offers individuals and sole proprietors a structured repayment plan to manage their debt over 3 to 5 years. It is especially useful for those who have steady income but need time to catch up on mortgage payments, stop vehicle repossession, or eliminate unsecured debt. Unlike Chapter 7, Chapter 13 allows you to keep your property while reorganizing your finances under court protection.

Wallace Law, PLLC serves clients across the Northern and Eastern Districts of Texas, including Dallas, Fort Worth, Plano, Arlington, Tyler, and the surrounding communities.

Who Qualifies for Chapter 13?

You may be eligible if you:
– Have regular income from employment, self-employment, or retirement
– Are behind on mortgage or vehicle payments and want to avoid foreclosure or repossession
– Have substantial tax debt or child support arrears
– Own non-exempt property you want to keep
– Do not qualify for Chapter 7 due to income or failed Means Test

Chapter 13 is also a valuable tool for sole proprietors and gig workers with business-related debt.

How Chapter 13 Works in Texas

1. Pre-Filing Preparation: We review your income, debts, expenses, and exemptions. Credit counseling is required before filing.
2. Filing the Petition: Includes detailed schedules of assets, liabilities, contracts, income, and a proposed repayment plan.
3. Automatic Stay: Once filed, all creditor actions are halted—foreclosures, garnishments, lawsuits, and collection calls must stop immediately.
4. Plan Confirmation: After filing, a plan confirmation hearing is held before the bankruptcy judge, usually within 30–60 days.
5. Monthly Payments Begin: You’ll make a single monthly payment to the court-appointed trustee, who distributes funds to creditors.
6. Plan Completion and Discharge: After 3 or 5 years (depending on your income), remaining dischargeable debt is wiped out.

Benefits of Chapter 13 Bankruptcy

– Stop Foreclosure and repay mortgage arrears over time
– Prevent Vehicle Repossession, reduce loan balances and interest (cramdown)
– Consolidate Tax Debt and repay over the life of the plan
– Avoid Wage Garnishment and lawsuits
– Protect Non-Exempt Assets you might lose in Chapter 7

Texas Bankruptcy Exemptions in Chapter 13

Although Chapter 13 allows you to keep all property, your repayment plan may depend on the value of your non-exempt assets. Texas exemptions include:
– Homestead: Unlimited equity in your primary residence (subject to acreage caps)
– Vehicles: One per licensed family member
– Personal Property: $50,000 (individual) / $100,000 (family)
– Tools of the Trade: $12,500 (individual) / $25,000 (family)
– Retirement Accounts and Wages: Fully exempt
Our attorneys ensure that your plan takes full advantage of these exemptions.

Debt Limits and Plan Duration

– Unsecured debt limit: $465,275 (as of 2025)
– Secured debt limit: $1,395,875
– 3-Year Plan: For debtors below Texas median income
– 5-Year Plan: Required for debtors above median income

Case Study: Fort Worth Family Saves Home from Foreclosure

A married couple in Fort Worth was $21,000 behind on their mortgage due to illness and missed work. Wallace Law filed a Chapter 13 petition that stopped the foreclosure sale and allowed repayment of the arrears over five years. They remained in their home, and all credit card debt was discharged upon plan completion.

Case Study: Self-Employed Driver in Lewisville Reduces Car Payment

A self-employed Uber driver in Lewisville was facing repossession on a high-interest auto loan. We used Chapter 13 to cram down the vehicle’s value, lowering the balance from $17,000 to $9,000 and the monthly payment from $615 to $345. The vehicle was saved, and his business remained operational.

Why Choose Wallace Law, PLLC?

– Decades of bankruptcy experience in the Northern and Eastern Districts of Texas
– In-depth knowledge of local trustee procedures and court expectations
– Custom, confirmable plans tailored to client needs and court standards
– Weekend and virtual appointments available
– Honest, compassionate guidance with aggressive legal protection

Proudly Serving

Dallas, Fort Worth, Plano, Arlington, Addison, Flower Mound, Lewisville, Denton, Richardson, Grand Prairie, North Richland Hills, DeSoto, Southlake, North Dallas, Highland Park, and Tyler.