If you’re considering filing bankruptcy in Austin, TX, you’ll need to understand the types, costs, as well as some helpful advice to finding good attorneys.

Am I Qualified for Bankruptcy?

Qualifying for bankruptcy in Austin, Texas, or anywhere else in the United States is a complex process governed by federal law. Bankruptcy is designed to provide individuals and businesses with a fresh financial start when they are unable to meet their debt obligations. While anyone can technically file for bankruptcy, whether you qualify for it and which type of bankruptcy you can file for depends on various factors, including your income, expenses, and the type of debt you have.

1. Chapter 7 Bankruptcy: Chapter 7 bankruptcy, also known as “liquidation” or “straight bankruptcy,” is the most common form of personal bankruptcy. To qualify for Chapter 7 in Austin, you must meet certain income requirements established under the “means test.” The means test compares your income to the median income for a household of your size in Texas. If your income is below the median, you are generally eligible for Chapter 7.

However, if your income exceeds the median, you may still qualify based on your disposable income. The means test deducts certain allowable expenses from your income to determine whether you have enough disposable income to repay a significant portion of your debts. If your disposable income is too high, you may be required to file for Chapter 13 instead.

2. Chapter 13 Bankruptcy: Chapter 13 bankruptcy, also known as “reorganization” or “wage-earner’s bankruptcy,” allows individuals with a regular income to develop a repayment plan to pay off their debts over three to five years. Unlike Chapter 7, there are no strict income limits for Chapter 13. However, you must have enough disposable income to make the required payments under your repayment plan while meeting your basic living expenses.
3. Business Bankruptcy: Businesses, including sole proprietorships, partnerships, and corporations, can also file for bankruptcy. Business bankruptcy typically falls under Chapter 7 or Chapter 11, depending on the nature and size of the business. To qualify, the business must be insolvent, meaning it cannot pay its debts as they become due.
4. Chapter 11 Bankruptcy: Chapter 11 bankruptcy is primarily used by businesses, including large corporations and small businesses, to reorganize and continue operations while repaying their debts over time. Individuals with substantial debts that exceed the limits of Chapter 13 may also file for Chapter 11. Qualifying for Chapter 11 often requires the assistance of legal counsel due to its complexity.
5. Chapter 12 Bankruptcy: Chapter 12 is designed specifically for family farmers and fishermen facing financial difficulties. To qualify for Chapter 12, you must meet certain debt and income requirements tailored to the farming or fishing industry. This chapter allows these individuals and families to develop a repayment plan that accommodates the seasonal nature of their income.
6. Chapter 9 Bankruptcy: Chapter 9 bankruptcy is reserved for municipalities, such as cities, counties, and school districts. It enables them to restructure their debts and continue providing essential services to their residents.
7. Chapter 15 Bankruptcy: Chapter 15 is used for cases involving international bankruptcy matters. It provides a framework for dealing with cross-border insolvency issues, making it distinct from individual and business bankruptcy filings.

Regardless of the chapter you may qualify for, bankruptcy should not be taken lightly. Filing for bankruptcy has significant legal and financial consequences, including potential damage to your credit score and the loss of certain assets. It is essential to consult with an experienced bankruptcy attorney in Austin, Texas, to assess your specific situation, explore your options, and determine the most suitable course of action.

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Do You Need a Lawyer to File For Bankruptcy in Austin, TX?

Filing for bankruptcy in Austin, Texas, is a legal process that can be complex and challenging to navigate on your own. While it is possible to file for bankruptcy pro se (without an attorney), it’s generally advisable to hire an experienced bankruptcy attorney to help you through the process.

Here are several reasons why you should consider hiring a lawyer when filing for bankruptcy in Austin:

1. Knowledge of Bankruptcy Laws: Bankruptcy laws are intricate and constantly evolving. An attorney specializing in bankruptcy law will have a deep understanding of both federal bankruptcy statutes and the specific rules and procedures relevant to the Austin, Texas, jurisdiction. They can ensure that you adhere to all the legal requirements and avoid potential pitfalls.
2. Legal Expertise: Bankruptcy attorneys are trained to evaluate your financial situation and determine the most suitable bankruptcy chapter for your specific circumstances, whether it’s Chapter 7, Chapter 13, or another chapter. They can provide valuable advice on how to protect your assets, minimize the impact on your credit score, and maximize the benefits of bankruptcy.
3. Assistance with Documentation: Filing for bankruptcy involves extensive paperwork, including detailed financial disclosures, income statements, expense schedules, and debt lists. An attorney can help you compile and complete these documents accurately, reducing the risk of errors that could lead to delays or complications in your case.
4. Protection from Creditor Harassment: Once you file for bankruptcy, an automatic stay goes into effect, prohibiting most creditors from pursuing collection efforts against you. An attorney can communicate with creditors on your behalf, ensuring they cease any harassment or collection actions, giving you peace of mind during the process.
5. Legal Representation in Court: Bankruptcy cases often require attendance at court hearings and meetings of creditors (341 meetings). Having an attorney by your side ensures that you have knowledgeable representation during these proceedings, which can be especially important if any disputes or objections arise.
6. Tailored Legal Strategies: Every bankruptcy case is unique, and an experienced attorney can develop a customized strategy to address your specific financial situation and goals. They can help you make informed decisions about asset exemptions, debt reaffirmation, and other critical aspects of your bankruptcy case.
7. Avoiding Costly Mistakes: Without legal guidance, you may inadvertently make mistakes that could result in the dismissal of your case, loss of assets, or other negative consequences. Bankruptcy attorneys can help you avoid these costly errors.
8. Post-Bankruptcy Planning: A bankruptcy attorney can also assist you in planning for life after bankruptcy. They can provide guidance on rebuilding your credit, managing your finances, and making the most of the fresh financial start bankruptcy provides.
9. Ensuring Eligibility and Qualifications: An attorney will assess your eligibility for bankruptcy, especially if you’re considering Chapter 7. They can help you pass the means test and meet all the necessary qualifications.
10. Peace of Mind: Filing for bankruptcy is a significant step in your financial life, and it can be stressful. Having an attorney to guide you through the process can provide reassurance and alleviate anxiety.

While it is possible to file for bankruptcy without an attorney, the benefits of having legal representation far outweigh the costs in most cases. Bankruptcy attorneys understand the nuances of the law and can help you achieve the best possible outcome while safeguarding your rights and interests. Before deciding to file for bankruptcy in Austin, Texas, it’s advisable to consult with an experienced bankruptcy attorney to assess your options and receive professional guidance tailored to your specific circumstances.

Cost to File Chapter 7 Bankruptcy in Austin, TX

The cost to file Chapter 7 bankruptcy in Austin, Texas, includes several components, and it’s essential to be aware of these fees and expenses before initiating the process. Keep in mind that these costs can vary depending on your specific circumstances and whether you choose to hire an attorney.

Here’s an overview of the primary expenses associated with filing Chapter 7 bankruptcy:

1. Court Filing Fee: The largest mandatory cost for filing Chapter 7 bankruptcy is the court filing fee. The filing fee for Chapter 7 bankruptcy in the Western District of Texas, which includes Austin, is $368. However, please note that court fees are subject to change over time, so it’s essential to check the current fee on the official website of the U.S. Bankruptcy Court or consult with an attorney.
2. Credit Counseling and Debtor Education Courses: Before and after filing for bankruptcy, you are required to complete credit counseling and debtor education courses from approved agencies. The cost of these courses can vary but typically ranges from $35 to $65 per course. Some agencies offer discounts or fee waivers for low-income individuals.
3. Bankruptcy Attorney Fees: While hiring an attorney is not mandatory for filing Chapter 7 bankruptcy, it is highly recommended for the complex nature of the process. Attorney fees can vary widely based on factors such as your location, the complexity of your case, and the attorney’s experience. On average, you can expect attorney fees for Chapter 7 bankruptcy to range from $1,200 to $2,700 or more. Many bankruptcy attorneys offer payment plans to make their services more affordable.
4. Miscellaneous Costs: There may be additional costs associated with your bankruptcy, such as postage, notary fees, and document retrieval fees. These expenses are typically relatively minor but can add up over the course of your bankruptcy proceedings.
5. Credit Report and Credit Score Monitoring: It’s advisable to monitor your credit reports and scores both before and after bankruptcy to ensure accuracy and track your progress in rebuilding your credit. While this is not a mandatory expense, it can be beneficial and costs can vary depending on the service you choose.
6. Exemption Costs: If you have assets that are not exempt under Texas bankruptcy laws, you may need to pay for appraisals or valuations to determine the value of those assets. These costs are only relevant if you have non-exempt property that could be liquidated in the bankruptcy process.
7. Transportation Costs: If you’re required to attend meetings, hearings, or appointments related to your bankruptcy, you should factor in transportation costs, including gas, parking, and public transportation expenses.

It’s important to remember that if you cannot afford to pay the required fees and costs upfront, you may be eligible for a waiver or installment plan for some of these expenses. To explore your options and understand the full scope of the costs associated with filing Chapter 7 bankruptcy in Austin, Texas, it’s advisable to consult with a bankruptcy attorney. They can provide you with a detailed breakdown of expenses, help you navigate the process, and determine the most cost-effective way to achieve debt relief.

Cost to File Chapter 11 Bankruptcy in Austin, TX

Filing for Chapter 11 bankruptcy in Austin, Texas, can be a complex and costly process, especially for businesses and individuals with substantial debts. Chapter 11 bankruptcy is typically utilized for business reorganization, and the costs associated with it can vary significantly depending on the complexity of the case and the specific circumstances. Here’s an overview of the primary expenses and factors that can influence the cost of filing Chapter 11 bankruptcy:

1. Attorney Fees: Engaging the services of an experienced bankruptcy attorney is crucial in Chapter 11 cases due to their complexity. Attorney fees for Chapter 11 bankruptcy in Austin can be substantial and often depend on the size and complexity of the debtor’s financial situation. Complex cases may require extensive legal work and negotiation with creditors. Attorney fees can range from tens of thousands to hundreds of thousands of dollars.
2. Court Filing Fees: The initial filing fee for a Chapter 11 case can be significant. The filing fee for a Chapter 11 case in the Western District of Texas, which includes Austin, is $1,898. However, these fees can change over time, so it’s essential to check the current fee on the official website of the U.S. Bankruptcy Court or consult with your attorney.
3. U.S. Trustee Fees: Chapter 11 cases are subject to quarterly fees based on the debtor’s disbursements and payments to creditors. The U.S. Trustee’s office calculates these fees, and they can also vary widely depending on the size and complexity of the case.
4. Professional Fees: In many Chapter 11 cases, debtors are required to hire various professionals, such as financial advisors, appraisers, and accountants, to assist in the bankruptcy process. These professionals’ fees can add a substantial expense to the overall cost of the bankruptcy case.
5. Creditors’ Committees: In some Chapter 11 cases, especially those involving larger businesses, creditors may form committees to represent their interests. The debtor is generally responsible for paying the reasonable expenses of these committees.
6. Administrative Costs: Administrative costs can include expenses related to operating the business during bankruptcy, such as rent, utilities, employee wages, and other ongoing business expenses.
7. Plan Confirmation: The process of developing and confirming a Chapter 11 reorganization plan can be time-consuming and costly. This may involve negotiations with creditors, legal work, and professional fees.
8. Post-Bankruptcy Compliance: After emerging from Chapter 11, there may be ongoing costs associated with complying with the terms of the confirmed plan, which can extend for several years.

It’s important to note that Chapter 11 bankruptcy cases can take years to complete, and the costs can escalate significantly over time. Given the complexity and financial commitment involved in a Chapter 11 filing, it’s essential to consult with a knowledgeable bankruptcy attorney in Austin who can assess your specific situation, provide a realistic estimate of potential costs, and guide you through the process.

Cost to File Chapter 13 Bankruptcy in Austin, TX

The cost of filing for Chapter 13 bankruptcy in Austin, Texas, includes various fees and expenses that debtors should be aware of when considering this type of bankruptcy. Chapter 13 bankruptcy is a reorganization plan that allows individuals with a regular income to repay their debts over a three to five-year period. Here’s an overview of the primary costs associated with filing Chapter 13 bankruptcy:

1. Court Filing Fee: The court filing fee for a Chapter 13 bankruptcy case is a mandatory cost. The filing fee for Chapter 13 in the Western District of Texas, which includes Austin, is $352. However, please note that these fees can change over time, so it’s essential to verify the current fee on the official website of the U.S. Bankruptcy Court or through your attorney.
2. Attorney Fees: Hiring an experienced bankruptcy attorney is highly recommended for Chapter 13 cases, as they can help you navigate the complex process and ensure that your repayment plan is structured correctly. Attorney fees for Chapter 13 can vary based on your location, the complexity of your case, and the attorney’s experience. On average, attorney fees for Chapter 13 may range from $3,220 to $4,740 or more. Some attorneys offer payment plans to make their services more accessible.
3. Credit Counseling and Debtor Education Courses: Before and after filing for Chapter 13 bankruptcy, you are required to complete credit counseling and debtor education courses from approved agencies. These courses typically cost between $28 and $60 each. Some agencies offer fee waivers or reduced rates for low-income individuals.
4. Trustee Fees: In a Chapter 13 case, a bankruptcy trustee is appointed to oversee the repayment plan and disburse payments to creditors. The trustee is entitled to a fee, which is calculated as a percentage of the payments made to creditors. This fee is included in your monthly payment plan.
5. Miscellaneous Costs: There may be additional expenses associated with your Chapter 13 bankruptcy case, such as postage, notary fees, and document retrieval fees. While these costs are generally minor, they can add up over the course of your case.
6. Post-Bankruptcy Counseling: After completing your Chapter 13 repayment plan, you are required to attend a financial management course. The cost for this course is typically similar to the credit counseling and debtor education courses.

It’s essential to consult with a qualified bankruptcy attorney in Austin, Texas, before filing for Chapter 13 bankruptcy to understand the full scope of expenses, evaluate your eligibility, and create a repayment plan that suits your financial situation. Keep in mind that Chapter 13 bankruptcy provides a structured way to repay your debts and protect your assets, making it a valuable option for individuals who have a regular income but are struggling with overwhelming debt. Your attorney can help you develop a feasible repayment plan and guide you through the process to achieve financial relief and a fresh start.

Reliable Bankruptcy Attorneys in Austin, TX

Below is a list of reputable bankruptcy attorneys in Austin, TX. They can help you with both personal and business bankruptcy information.

Law Office of Susan G. Taylor
1502 West Ave, Austin, TX 78701, United States

Fred E. Walker, Attorney at Law
108 Wild Basin Rd S Suite 250, Austin, TX 78746, United States

Law Office of Michael Baumer
7600 Chevy Chase Dr, Austin, TX 78752, United States

Heimer Law Offices P.C.
6633 U.S. 290 East Frontage Road, Suite 205, Austin, TX 78723, United States

Hickson Law PC
4833 Spicewood Springs Rd Ste 200 Suite 200, Austin, TX 78759, United States

Austin, TX Zip Codes We Proudly Serve:

78610, 78613, 78617, 78641, 78652, 78653, 78660, 78664, 78681, 78701, 78702, 78703, 78704, 78705, 78712, 78717, 78719, 78721, 78722, 78723, 78724, 78725, 78726, 78727, 78728, 78729, 78730, 78731, 78732, 78733, 78734, 78735, 78736, 78737

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