What Is a Chapter 7 Bankruptcy?

chapter 7 bankruptcy texasChapter 7 bankruptcy is the most common type of bankruptcy.

This type of bankruptcy is for individuals and small businesses who are overwhelmed by debt and unable to pay their bills.

In a Chapter 7 bankruptcy, you may be able to permanently eliminate, or discharge, certain types of debt. Your debt could include credit cards, payday loans, and medical bills.

You may have heard a Chapter 7 bankruptcy called a straight bankruptcy or a liquidation. Many people have heard stories about debtors losing assets in a Chapter 7 bankruptcy. In certain cases, the court can sell off non-exempt property to partially repay creditors. However, what property you are allowed to keep depends on state law.

Here in Texas, many types of property are exempt. Individuals and families may keep their:

  • Home,
  • Cars,
  • Personal belongings,
  • Retirement accounts,
  • Bank accounts,
  • Boats, and
  • Rental properties.

Other items are exempt as well. In Texas, the vast majority of Chapter 7 bankruptcies do not lose any assets.


Speak with a Texas bankruptcy attorney today to discuss your case.


You need an experienced bankruptcy attorney who can help ensure that you and your assets are protected. If there is a problem with one of your assets, we will work together to find a solution. The important thing is to be honest and let your attorney help you.

For most individuals and families, Chapter 7 bankruptcy is the fastest and most cost-effective means for a fresh start. Contact us today for your FREE no-obligation consultation to answer your questions.

Do I Qualify for a Chapter 7 bankruptcy?

A Chapter 7 bankruptcy is the fastest and typically the easiest way to get you back to living your life in Central Texas. However, many people aren’t sure if they qualify because they have heard rumors about Chapter 7 bankruptcy and who is eligible.

Rumor #1: I am current on all my debt, so I don’t qualify for bankruptcy.

Truth: Some people who file bankruptcy are current on their debt and some are behind. Whether you are current or past due does not affect your ability to file bankruptcy.

Rumor #2: I don’t owe enough money to file bankruptcy.

Truth: There is no minimum debt requirement before you can file bankruptcy. As a Waco bankruptcy attorney, I have filed bankruptcy for people who have owed over $100,000.00 to credit cards and people who have owed as little as $10,000.00 to credit cards. Bankruptcy is about getting a fresh start. If you only make $20,000.00 a year and you owed $8,000.00 in credit cards, you need and deserve a fresh start.

Rumor #3: I make too much money to file bankruptcy.

Truth: In 2005, bankruptcy law changed dramatically. One of the most talked about changes is the “means test”. The means test is a bankruptcy test designed by Congress to compare the last 6 months of income of someone who is filing bankruptcy to the last 6 months of income of families the same size in the same county.

If you are over the median income for families the same size in the same area there is a presumption that you are unable to file a Chapter 7 bankruptcy.

However, an experienced bankruptcy attorney who is experienced with the new bankruptcy laws can and do file over the median Chapter 7 bankruptcies all the time.

Do You Have More Questions About Bankruptcy?

Contact the experienced bankruptcy attorneys at Simer & Tetens to schedule your free consultation today!


We will do our best to accommodate your busy schedule. Request a consultation today!

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