Personal Bankruptcy
Chapter 7 Bankruptcy
Chapter 7 is the most common form of personal bankruptcy and often the fastest path to relief. It lets qualifying individuals clear most unsecured debt, things like credit cards, medical bills, and personal loans, and get a genuine fresh start. After you file, an automatic stay stops creditor calls, lawsuits, garnishments, and other collection efforts. Most cases run three to six months from filing to discharge.
This page walks through how Chapter 7 works, who qualifies, what you keep, and what to expect at each step. It's here for you before you decide, and to refer back to while your case is underway.
Is Chapter 7 right for you?
Chapter 7 is built for people whose income leaves little or nothing to repay unsecured debt. Whether you qualify comes down to a means test that compares your household income to the Texas median for your family size. If you're below the median, you generally qualify. If you're above it, qualifying depends on your income measured against allowed expenses, and another path may fit better.
The honest answer is that eligibility depends on your specific numbers. Jerome reviews your situation personally before recommending Chapter 7 or anything else, because the right answer isn't always the obvious one.
What you keep
A common fear is that filing means losing everything. For most people, that isn't what happens. Texas has some of the most generous exemption laws in the country, and exempt property is protected from creditors.
- Your home. Texas protects unlimited equity in your homestead, subject to acreage limits (10 acres urban, up to 100 acres rural for a single person or 200 for a family).
- Your vehicle. One vehicle per licensed driver in the household is protected.
- Retirement. Qualified retirement accounts and pensions are generally fully protected.
- Personal property. Household goods, clothing, and tools of your trade are protected up to generous limits.
Most people who file Chapter 7 keep everything they own. Jerome will go through your property with you so there are no surprises.
What gets wiped out, and what doesn't
Chapter 7 discharges most unsecured debt: credit cards, medical bills, personal loans, and similar obligations. Once discharged, you are no longer legally responsible for those debts, and creditors cannot pursue them.
Some debts are not dischargeable, including most child support and alimony, most recent taxes, and most student loans. Secured debts like a car loan or mortgage are handled differently: you can keep the property by continuing to pay, or surrender it and discharge the balance. Jerome will sort your debts into what goes and what stays so you know exactly where you stand.
The process, step by step
Most of the work falls on us. Your part is mostly providing information and showing up. Here's exactly who does what, from first call to fresh start.
- 1
Free consultation
YouCome in and share your situation honestly.WeReview it and confirm whether Chapter 7 is the right fit. - 2
Initial client forms
YouComplete a short set of starter forms.WeSet up your file and get you oriented. - 3
We pull your credit report
YouNothing on your end.WePull your credit from all three bureaus so no debt gets missed. - 4
Review your credit report
YouLook it over and flag anything missing or wrong.WeAdd anything you catch to your list of creditors.
- 5
Gather your documents and complete intake
YouCollect the documents on the checklist below and fill out the detailed intake forms.WeGive you the full list and answer any questions along the way. - 6
We draft your petition
YouNothing on your end.WePrepare the petition, schedules, and supporting documents. - 7
Review and approve
YouRead the petition with us and confirm everything is accurate.WeWalk you through it and make any corrections.
- 8
Credit counseling course
YouComplete a short approved course, about an hour.WePoint you to an approved provider and confirm your certificate. - 9
Filing
YouNothing on your end.WeFile with the court. The automatic stay takes effect and creditor contact stops. - 10
Practice meeting of creditors
YouOnce your 341 is scheduled, we'll send you a prep packet, complete and return it as soon as you receive it. You'll also provide bank statements for all accounts covering the 90 days before your filing date. Then join a short Zoom session with Jerome to go over what to expect.WeSend your packet, then walk you through exactly what the trustee will ask, so nothing about the real meeting catches you off guard.If your case is in the Southern District of Texas, which covers Houston and much of the region, your packet will include a 341 Meeting Questionnaire for the trustee. Complete it along with the rest of the packet.
- 11
341 meeting of creditors
YouAttend a short video meeting and answer the trustee's questions.WeSchedule the meeting and attend it with you. - 12
Financial management course
YouComplete a second short course.WeConfirm it's done and on file. - 13
Reaffirmation, if applicable
YouDecide, with our advice, whether to keep any secured debt such as a car.WeHandle the agreement and paperwork if you choose to. - 14
Discharge
YouNothing on your end.WeHandle the court process. Your dischargeable debts are wiped out and your fresh start is official.
What you'll need to gather
You don't need every item before your consultation. Bring what you have, and we'll help you track down the rest.
View full checklist
Identity
- Government-issued photo ID (driver's license or state ID)
- Social Security card or official proof of your Social Security number
Income
- Pay stubs or proof of income for the last six months
- Proof of any other income (Social Security, disability, unemployment, retirement, child support)
- A profit and loss statement if you're self-employed
Taxes
- Federal tax returns for the last two years
Bank and financial accounts
- Bank statements for all accounts (we'll need the 90 days before your filing date)
- Statements for any retirement or investment accounts
Property
- Vehicle titles or loan statements for each vehicle
- Deed or mortgage statement for any real estate you own
- Documentation for other valuable property
Debts
- Recent statements and bills (credit cards, medical, personal loans)
- Any collection letters, lawsuits, or garnishment notices you've received
Common questions
Will I lose my house or car?
Usually no. Texas exemptions protect your homestead and a vehicle per driver. Most people keep everything.
Will creditors stop calling?
Yes. The automatic stay stops creditor calls, lawsuits, and garnishments the moment you file.
How long does it take?
Most Chapter 7 cases finish three to six months from filing to discharge.
Do I have to go to court?
Just one short, informal meeting with the trustee, now by video, and Jerome prepares you and attends with you.
Will everyone know I filed?
Bankruptcy is part of the public record, but in practice the people who know are the ones you tell. It is rarely noticed by anyone else.
Want to go deeper?
We've put four decades of bankruptcy experience into free, plain-English guides, no email required. Read about how Chapter 7 works, what it costs, what you keep, and more.
Browse the Free LibraryStill have questions?
Jerome A. Brown is Board Certified Attorney in Consumer and Business Bankruptcy by the Texas Board of Legal Specialization. He'll review your specific situation personally before recommending any path.
Schedule Your Free ConsultationServing clients across Texas. Offices in Austin metro and Victoria.