Overview: What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also known as ‘liquidation bankruptcy,’ is designed to help individuals and small business owners eliminate unsecured debt and get a fresh start. At Wallace Law, PLLC, we represent clients throughout the Northern and Eastern Districts of Texas—including Dallas, Fort Worth, Plano, Denton, and Tyler—helping them protect exempt property while discharging burdensome debt.

Who Qualifies for Chapter 7?

Chapter 7 is ideal for individuals who:
– Have limited income or are unemployed
– Carry high credit card, medical, or personal loan debt
– Have few assets or mostly exempt property
– Do not have the disposable income to support a Chapter 13 repayment plan

Qualification depends on the Means Test, which compares your income to the Texas median for your household size. Our firm helps you calculate eligibility and strategize exemptions.

Texas Bankruptcy Exemptions in Chapter 7

Texas offers some of the most generous bankruptcy exemptions in the nation, protecting most basic property:
– Homestead: Unlimited equity in your primary residence (10 acres urban / 100 rural)
– Vehicle: One per licensed household member
– Personal Property: Up to $50,000 individual / $100,000 family (including furniture, clothing, firearms, pets, etc.)
– Tools of the Trade: Up to $12,500 individual / $25,000 family
– Wages and Retirement Accounts: Fully exempt in most cases

Chapter 7 Process in the Northern and Eastern Districts of Texas

1. Pre-Filing Evaluation: Includes credit counseling and asset review
2. Petition Filing: Filed in the local division of the U.S. Bankruptcy Court
3. Automatic Stay: Creditors must stop all collection activity
4. Trustee Appointment: A court-appointed trustee reviews your case
5. 341 Meeting of Creditors: A brief hearing, usually 30–45 days after filing
6. Discharge of Debts: Most unsecured debts are eliminated in 3–5 months

Non-Dischargeable Debts in Chapter 7

– Student loans (except in rare cases of undue hardship)
– Recent taxes (generally less than 3 years old)
– Child support and alimony
– Debts incurred through fraud or willful misconduct

Case Study: Plano Family Discharges $82,000 in Debt

A married couple in Plano faced overwhelming credit card and medical debt following job loss and a medical emergency. We guided them through Chapter 7 and used Texas exemptions to protect their home, two vehicles, retirement accounts, and household goods. They received a full discharge within 90 days, and began rebuilding credit within months.

Why Choose Wallace Law, PLLC?

– Thorough Means Test evaluations
– Proven record of protecting homes and exempt property
– Trusted representation in both the Northern and Eastern Districts of Texas
– Compassionate support from start to discharge

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 7 Bankruptcy

Overview: What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also known as ‘liquidation bankruptcy,’ is designed to help individuals and small business owners eliminate unsecured debt and get a fresh start. At Wallace Law, PLLC, we represent clients throughout the Northern and Eastern Districts of Texas—including Dallas, Fort Worth, Plano, Denton, and Tyler—helping them protect exempt property while discharging burdensome debt.

Who Qualifies for Chapter 7?

Chapter 7 is ideal for individuals who:
– Have limited income or are unemployed
– Carry high credit card, medical, or personal loan debt
– Have few assets or mostly exempt property
– Do not have the disposable income to support a Chapter 13 repayment plan

Qualification depends on the Means Test, which compares your income to the Texas median for your household size. Our firm helps you calculate eligibility and strategize exemptions.

Texas Bankruptcy Exemptions in Chapter 7

Texas offers some of the most generous bankruptcy exemptions in the nation, protecting most basic property:
– Homestead: Unlimited equity in your primary residence (10 acres urban / 100 rural)
– Vehicle: One per licensed household member
– Personal Property: Up to $50,000 individual / $100,000 family (including furniture, clothing, firearms, pets, etc.)
– Tools of the Trade: Up to $12,500 individual / $25,000 family
– Wages and Retirement Accounts: Fully exempt in most cases

Chapter 7 Process in the Northern and Eastern Districts of Texas

1. Pre-Filing Evaluation: Includes credit counseling and asset review
2. Petition Filing: Filed in the local division of the U.S. Bankruptcy Court
3. Automatic Stay: Creditors must stop all collection activity
4. Trustee Appointment: A court-appointed trustee reviews your case
5. 341 Meeting of Creditors: A brief hearing, usually 30–45 days after filing
6. Discharge of Debts: Most unsecured debts are eliminated in 3–5 months

Non-Dischargeable Debts in Chapter 7

– Student loans (except in rare cases of undue hardship)
– Recent taxes (generally less than 3 years old)
– Child support and alimony
– Debts incurred through fraud or willful misconduct

Case Study: Plano Family Discharges $82,000 in Debt

A married couple in Plano faced overwhelming credit card and medical debt following job loss and a medical emergency. We guided them through Chapter 7 and used Texas exemptions to protect their home, two vehicles, retirement accounts, and household goods. They received a full discharge within 90 days, and began rebuilding credit within months.

Why Choose Wallace Law, PLLC?

– Thorough Means Test evaluations
– Proven record of protecting homes and exempt property
– Trusted representation in both the Northern and Eastern Districts of Texas
– Compassionate support from start to discharge

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.