Filing for bankruptcy isn’t an easy decision for anyone in Texas considering this option to manage debt. Once it’s decided to explore options with Chapter 13, many people have questions about the details associated with this approach to bankruptcy. With income, there is no limit for filing, nor is there a limit to how much debt someone can have. However, there are limits with secured and unsecured debt: $394,725 and $1,184,200, respectively.

It doesn’t matter where someone’s income comes from when filing for Chapter 13 bankruptcy as long as there is an honest desire to make arrangements to pay down debt; income sources will need to be disclosed within two weeks of filing. Debtors are also required to provide proof that they filed their state and federal income taxes for the past four years. Failure to do so could result in a delay or dismissal.

Sometimes referred to as “wage earner’s bankruptcy,” Chapter 13 is meant for individuals with a valid source of income who are having some trouble paying their creditors on time. This type of reorganization bankruptcy does not require a debtor to give up their home, vehicle or other assets. Also, the amount of time spent in Chapter 13 varies based on income and the amount of debt owed. In some cases, a debtor may be able to secure an auto loan while in Chapter 13 with approval from the court.

A Chapter 13 bankruptcy attorney may explain the specific steps involved for debtors filing for this type of creditor protection. For example, filers are required to go through credit counseling from an approved agency first. A court-appointed trustee will then help a debtor come up with a reasonable repayment plan. A lawyer may help to make sure a bankruptcy filing is handled properly to avoid fines and other potential penalties.