Key Takeaways

• Chapter 13 may allow you to keep assets while creating a structured repayment plan.
• Filing triggers an automatic stay, halting foreclosure, repossession, and creditor harassment.
• Chapter 13 significantly impacts credit scores and requires a long-term financial commitment.
• Debt settlement or counseling may provide faster, less damaging alternatives to Chapter 13, but cannot protect from foreclosure or repossession if you are trying to keep secured debt assets. 
• At Debt Redemption Texas Debt Relief, we offer Texas residents cost-effective alternatives to Chapter 13, helping reduce high-interest debt with over two decades of experience.

 

Please note that Debt Redemption is not a law firm and does not give legal advice. Nothing in this article should be construed as legal advice. Debt Redemption can recommend a highly-rated Texas bankruptcy law firm if you would like bankruptcy legal advice. 

 

 

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Filing for Chapter 13 Bankruptcy Texas Process

Filing for Chapter 13 bankruptcy in Texas can help reorganize debt into a manageable payment plan over three to five years while allowing you to keep your assets.

Chapter 13 bankruptcy works best for individuals with a regular income who can commit to a repayment plan. It’s often chosen by those behind on mortgage payments or other secured debts who want to keep their property. 

Mandatory Credit Counseling and Debtor Education Courses

Before filing, complete a credit counseling course from a court-approved third-party provider. After filing, finish a debtor education course to gain financial management tools and strategies. These courses are mandatory and ensure you have the knowledge to manage your finances effectively.

Preparing and Filing Your Chapter 13 Petition

After completing the required courses:

• Gather information about your financial situation, including:
  • Real estate and personal property
  • Debts and creditors
  • Income and expenses
  • Co-debtors and leases

Your attorney will help compile this data and complete the necessary forms. Filing your petition initiates your Chapter 13 case. Once filed, an automatic stay prevents foreclosure, repossession, wage garnishments, and creditor harassment, giving you space to work on your repayment plan.

7 Things You Need to Know About Filing Chapter 13 in Texas

1. Stopping Foreclosure: Chapter 13 can stop foreclosure if you’re behind on mortgage payments—allowing you to catch up on missed payments over time while keeping your home.
2. Preventing Repossession: Chapter 13 can prevent the repossession of your car or other secured property. Including these debts in your repayment plan allows you to keep your assets while paying off what you owe.
3. Halt Wage Garnishments: Filing Chapter 13 halts wage garnishments. Once you file, the automatic stay stops creditors from garnishing your wages, giving you more control over your income.
4. End Creditor Harassment: The automatic stay also ends creditor harassment—preventing creditors from contacting you about your debts and providing relief from constant calls and letters.
5. Retaining Property Ownership: Chapter 13 enables you to retain ownership of your home, car, and other assets by creating a manageable repayment plan that addresses your debts.

Alternatives to Filing Chapter 13 Bankruptcy

Debt Settlement

Debt settlement involves negotiating with creditors to reduce the total amount owed. This can be quicker and less costly than Chapter 13  bankruptcy for some people, but may negatively impact your credit score.

Debt Counseling

Debt counseling helps manage finances and develop a debt repayment plan. A credit counselor assists in creating a budget and negotiating with creditors, allowing you to get back on track without filing for bankruptcy.

Debt Consolidation

Debt consolidation combines multiple debts into one loan with a lower interest rate, making payments more manageable. This option works well if you have good credit and can qualify for favorable loan terms. However, it requires discipline, as missed payments can worsen your financial situation.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy suits individuals with limited assets and disposable income. It involves selling non-exempt assets—such as valuable property not protected by state exemptions—to repay creditors. This process provides a quicker path to debt discharge than Chapter 13, usually within a few months. However, it carries significant drawbacks, including the loss of non-exempt property and a severe impact on credit scores, which can remain affected for up to 10 years​.

Pros and Cons of Filing Chapter 13 in Texas

Pros	Cons
Structured repayment plan over three to five years based on your income and expenses.	Significantly impacts credit score and stays on your report for up to 10 years.
Protects co-signers from creditors pursuing payment.	Requires a three to five-year repayment plan—longer than Chapter 7.
Allows high-income earners to keep property and reorganize debts.	Includes attorney fees, court filing fees, and administrative costs.
Lets you catch up on missed mortgage or car payments.	Makes it difficult to obtain new credit during repayment.
	Long-term commitment—missed payments can jeopardize the case.

Debt Advice for Chapter 13 Filers

Creating a Manageable Budget

• Track income and expenses to ensure you meet monthly obligations.
• Include essential expenses like housing, utilities, food, transportation, and healthcare.
• Allocate a portion of your income toward the repayment plan and stick to it.

Maintaining Regular Payments

• Make payments on time each month to keep your bankruptcy case on track.
• Set up automatic payments to avoid missing due dates.

Communicating with Creditors

• Notify creditors of your Chapter 13 filing.
• Keep them updated on repayment progress.
• Communicate any financial difficulties to your bankruptcy trustee and creditors promptly to avoid potential legal issues.

Tracking Financial Progress

• Regularly review your budget and track your expenses.
• Use financial management tools or apps to simplify this process.
• Make adjustments to your budget as needed to stay aligned with your financial goals.

How Debt Redemption Texas Debt Relief Can Help

At Debt Redemption Texas Debt Relief, we specialize in providing tailored debt solutions exclusively for Texans. With over two decades of experience, we understand the specific rules, regulations, and benefits unique to Texas.

Our services include free Debt Settlement Consultations, and support in securing debt consolidation loans up to $100,000 through our affiliate platform.

We offer a Texas-specific debt settlement program—often a much better alternative to bankruptcy—aimed at reducing your high-interest debt in as little as 12-60 months. 

Program payments are often less than half of minimum credit card payments, helping many Texans free up and better manage their finances. Our fees are up to 40% less than out-of-state debt relief services, making our program a cost-effective choice for those seeking relief.

Since 2002, we have helped thousands of Texans reduce debt-related stress and take control of their financial future.

 

Book your free consultation

 

Frequently Asked Questions (FAQ)

Can I keep my house if I file Chapter 13?

Yes, Chapter 13 stops foreclosure and allows you to catch up on missed payments through a repayment plan.

How long does Chapter 13 stay on my credit report?

It stays on your credit report for up to 7 years and could be public record for life. Regular payments after the bankruptcy and responsible financial behavior can help rebuild your credit.

What happens if I miss a payment?

Missing a payment can put your case at risk. The court may dismiss it, and you could lose the automatic stay protection. If you have financial issues, inform your trustee and creditors immediately to discuss options.

Can I get a personal loan during Chapter 13?

Getting new credit is challenging, and court approval may be required. Focus on managing current debts and keeping payments on track.

How is the Chapter 13 payment plan determined?

The plan is based on your income, expenses, and debt. Your trustee proposes a three-to-five-year plan for court approval.

Why should I choose Debt Redemption Texas Debt Relief?

With over two decades of experience, we at Debt Redemption Texas Debt Relief specialize in Texas-specific debt solutions—offering free consultations and debt settlement options. Visit our website to learn more.