Find Bankruptcy Lawyers Near You in New Braunfels, TX

Bankruptcy law provides individuals and businesses in New Braunfels, Texas, with a legal pathway to address overwhelming debt. The two most common consumer filings are Chapter 7 and Chapter 13, while Chapter 11 is typically reserved for businesses or individuals with debt exceeding statutory limits. Chapter 7, often called liquidation bankruptcy, requires the debtor to surrender non-exempt assets to a trustee, who sells them to pay creditors. In exchange, most unsecured debts are discharged within three to five months. This option works best for those with limited income who cannot realistically repay their debts. Chapter 13, by contrast, is a reorganization plan for individuals with regular income who can commit to a three-to-five-year repayment plan. It allows debtors to catch up on mortgage arrears, pay nondischargeable debts like tax obligations, and keep all assets, including nonexempt property. Chapter 11 is more complex and expensive, designed for businesses or individuals with debt exceeding the Chapter 13 limits of $2.75 million in secured and unsecured debt combined. Choosing the right chapter depends on your income, asset value, and financial goals, and a careful analysis of your situation is essential before filing.

Texas law offers debtors a choice between state and federal bankruptcy exemptions, and for most residents, the state exemptions are significantly more generous. Texas has opted out of the federal exemption system, meaning you must use state exemptions unless you have lived in Texas for less than two years. The Texas homestead exemption is among the most protective in the nation, allowing you to exempt an unlimited amount of equity in your primary residence, provided the property is on one acre in an urban area like New Braunfels or up to 100 acres in a rural area. There is no dollar cap on this exemption, which can be a powerful tool for homeowners facing foreclosure. For vehicles, Texas allows an exemption of up to $15,000 in equity per person, or $30,000 for a married couple filing jointly. The state also provides a wildcard exemption of $60,000 per family for any personal property you choose, which can cover cash, stocks, or household goods. Additionally, Texas exempts retirement accounts like 401(k)s and IRAs, life insurance policies, and most personal effects. These exemptions are codified in the Texas Property Code, Sections 41.001 and 42.001, and they do not require you to use a federal exemption list. Understanding these exemptions is critical because they determine what property you can keep after filing.

The means test is a mandatory calculation that determines whether you qualify for Chapter 7 bankruptcy. It compares your household income over the six months preceding your filing to the median income for a household of your size in Texas. As of 2024, the median annual income for a single-person household in Texas is approximately $60,000, for a two-person household about $75,000, for a three-person household about $85,000, and for a four-person household about $100,000. If your income falls below the median, you automatically pass the means test and can file Chapter 7. If your income exceeds the median, you must complete a detailed calculation of your disposable income after subtracting allowed expenses, such as housing, food, transportation, and healthcare. If your disposable income is less than $100 per month, you still qualify for Chapter 7. If it is between $100 and $166 per month, you must compare it to a percentage of your non-priority unsecured debt. If it exceeds $166 per month, you are presumed to have enough income to repay creditors and will likely be required to file Chapter 13 instead. The means test is a federal requirement under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, and it must be filed with the court using Official Form 122A-1 for Chapter 7 or Form 122C-1 for Chapter 13. A bankruptcy lawyer in New Braunfels can help you calculate this accurately, as errors can lead to dismissal or conversion of your case.

Filing bankruptcy triggers an automatic stay, which immediately stops most collection actions, including phone calls from creditors, wage garnishments, foreclosure proceedings, repossession, and lawsuits. This protection begins the moment your petition is filed with the bankruptcy court in San Antonio, which serves Comal County, where New Braunfels is located. The timeline from filing to discharge varies by chapter. For Chapter 7, the process typically takes three to five months. You must file all required documents, attend the meeting of creditors (also called the 341 meeting) about 30 days after filing, and complete two mandatory courses: a pre-filing credit counseling course from an approved agency and a post-filing debtor education course. The credit counseling must be completed within 180 days before filing, and the debtor education must be completed before your debts are discharged. For Chapter 13, the timeline is longer because you must propose a repayment plan, have it confirmed by the court, and make payments for three to five years. The automatic stay remains in effect throughout the plan, but creditors can seek relief from the stay if you fail to make plan payments. The discharge in Chapter 13 occurs after you complete all payments, though some debts may be discharged earlier. Throughout the process, you must cooperate with the trustee, provide requested financial documents, and attend all hearings. Failure to do so can result in dismissal of your case or denial of discharge.

The costs of filing bankruptcy include court filing fees, attorney fees, and course fees. As of 2024, the filing fee for Chapter 7 is $338, and for Chapter 13 it is $313. These fees are set by the federal judiciary and are nonrefundable, though you may request to pay them in installments if you cannot afford the full amount upfront. Attorney fees in New Braunfels vary widely based on the complexity of your case. For a straightforward Chapter 7, fees typically range from $1,200 to $2,500, with many attorneys offering flat-fee arrangements. For Chapter 13, fees are higher, usually between $3,000 and $5,000, because the case lasts longer and requires more court appearances and plan administration. Some attorneys allow you to pay Chapter 13 fees through the repayment plan itself, meaning you do not have to pay the full amount upfront. Additionally, you must pay for the credit counseling course, which costs about $10 to $50, and the debtor education course, which costs about $10 to $50. If you cannot afford any attorney fees, you may qualify for pro bono services through organizations like Texas Legal Services Center or the State Bar of Texas Lawyer Referral and Information Service. The bankruptcy court also allows you to file without an attorney, but this is not recommended because the rules are complex and errors can be costly. Remember that these costs are general estimates and can change based on your specific circumstances and the attorney you choose.

Life after bankruptcy involves understanding how long the filing affects your credit and what steps you can take to rebuild. A Chapter 7 discharge remains on your credit report for 10 years from the filing date, while a Chapter 13 discharge remains for 7 years. This does not mean you cannot obtain credit during that time; many lenders offer secured credit cards, auto loans, and even mortgages after two to four years, though interest rates will be higher. To rebuild credit, start by obtaining a secured credit card with a small deposit, make small purchases and pay the balance in full each month, and ensure all payments are on time. You can also become an authorized user on a family members credit card with good history. Monitor your credit reports from Equifax, Experian, and TransUnion for errors, and dispute any inaccuracies. Some debts survive bankruptcy and must still be paid. Student loans are generally nondischargeable unless you can prove undue hardship in an adversary proceeding, which is difficult. Most tax debts are not dischargeable, especially if they are less than three years old or if you filed a fraudulent return. Child support and alimony obligations are never dischargeable, nor are debts from willful injury or drunk driving. Debts not listed in your bankruptcy schedules also survive. Finally, you cannot file for Chapter 7 again for eight years from your previous filing, and Chapter 13 can be filed sooner but with restrictions. A bankruptcy lawyer can help you plan for life after discharge and develop a strategy for financial recovery.