While bankruptcy may help Texas residents gain control over their finances, there are limits to how often a person can file. Individuals who filed for Chapter 7 bankruptcy cannot file another Chapter 7 petition for eight years. Furthermore, they cannot file for Chapter 13 bankruptcy for at least four years after the Chapter 7 case was filed. The rules are slightly different for debtors who file for Chapter 13 protection.
For example, they can generally file another Chapter 13 case as soon as their current one is closed. To convert a Chapter 13 case to a Chapter 7, six years must have passed from the date that the Chapter 13 case was filed. To file before that point, a debtor must show a good faith effort to follow through with a repayment plan. Furthermore, at least 70 percent of unsecured debts must have been repaid.
The time limits that a person faces may be altered if a case is dismissed instead of discharged. Bankruptcy cases could be dismissed because the debtor committed fraud or decided to voluntarily put an end to the proceeding. A bankruptcy case can also be dismissed if a debtor failed to comply with orders issued by the court. Those who wish to convert a Chapter 13 case to a Chapter 7 case will need to pay a fee and pass the means test.
Filing for Chapter 7 bankruptcy may allow a person to get out from debt that may be difficult to pay promptly. While the case is ongoing, it may be possible to receive an automatic stay from creditor contact. This means that property may not be repossessed or foreclosed upon by creditors. However, in a Chapter 7 bankruptcy case, property may be liquidated by the bankruptcy trustee.