Chapter 7 or 13: Which is Right for Me?

Attorneys Helping the People of Texas

There are two main types of bankruptcy for consumers: Chapter 7 and Chapter 13. Each is appropriate for different situations. Before you file for either a Chapter 7 or Chapter 13 bankruptcy, you should understand the differences and how they apply to you.

At Fears | Nachawati, our lawyers work closely with each client to make sure they are choosing the best type of bankruptcy for their specific situation. We spend plenty of time with each client, and welcome anyone in Dallas-Forth Worth, Austin, Houston, and surrounding areas of Texas to contact us with their questions.

How Much Do You Make?

A chief difference between Chapter 7 and Chapter 13 is that you must go through a "means test" to qualify for a Chapter 7. If you do not pass the means test, you can always file for a Chapter 13.

The means test is complex, but a large part of it involves whether you make above or below the median income in your state. At this writing, the median income in Texas is $34,418 for a one-person household, $48,849 for two people, $51,678 for three people, and $59,369 for four people. For each additional person, add $6,300.

If your household earns less than the median, you can qualify for a Chapter 7 bankruptcy. But if you earn more and still want a Chapter 7, our lawyers can sit down with you and analyze your case. You may still qualify, but we would need to look at your case in greater detail.

The means test only determines who qualifies for Chapter 7, not who is best served by it. It is possible that even if you qualify for a Chapter 7, you will be better off with a Chapter 13 bankruptcy. For more about each, see our What Is Chapter 7 and What Is Chapter 13? pages.