Written by the Upsolve Team.
Updated September 30, 2020
Thomas Jefferson once mused that a person should never spend their money before they have it. This is good advice, but it isn’t always possible or practical. Sometimes, it makes sense to take out a loan or buy something on credit because it’s either a necessary purchase or doing so results in benefits that outweigh the financial risk of that arrangement. Other times, people simply “spend” money they don’t have by acquiring debt because there is simply no other option available to them. For example, when a child becomes very ill, parents need to take that child to the emergency department even if they don’t have money to pay the doctor who treats their child. Illness, injury, job loss, natural disasters, the loss of loved ones, and accidents all serve as reminders that even the most hardworking and responsible Texans can end up in debt through absolutely no fault of their own. If you’re struggling to make ends meet and to pay your bills no matter how hard you work, remember that your situation can happen to almost anyone. Also, know that there are solutions available for you and your family. For example, filing bankruptcy in Dallas can allow you to benefit from a fresh start by restructuring your debt and eliminating it over time or erasing eligible debt in as few as 90 days.
The Great Recession of 2008 destigmatized Texas bankruptcy when the serious economic downturn reminded all Americans of how precarious finances are even when you’re responsible and hardworking. If Dallas bankruptcy might be a good option for your family, take some time to learn about the process. Especially if you don’t earn much income and you don’t own a lot of valuable property, filing for bankruptcy could change your life for the better. In a perfect world, no one would struggle with unmanageable debt. But in a world where people sometimes have to spend money before they have it, bankruptcy is often an option worth considering.
Dallas Bankruptcy Lawyers – Estimated Cost
Many people are surprised to learn that they don’t necessarily have to worry about the cost of a bankruptcy lawyer when filing bankruptcy in Dallas. Some people hesitate to file for bankruptcy because they are worried about incurring legal fees. This is understandable, given that hiring bankruptcy help in Dallas for a Chapter 7 bankruptcy case can set you back anywhere from $975 - $2,000. However, the issue of “Dallas bankruptcy lawyer cost” is irrelevant for most low-income filers. Unless your finances are so complex that hiring an attorney becomes a good investment, you can absolutely file this straightforward kind of case yourself.
How to File Bankruptcy in Dallas, Texas for Free
Filing for Chapter 7 bankruptcy in Dallas may not be the right choice for everyone but it may be the best possible option for you and your family. Before you either commit to filing Texas bankruptcy or dismiss bankruptcy as a possible debt relief solution, read the following information about the process; it will help you make an informed choice either way.
Collect Your Dallas Bankruptcy Documents
Filing bankruptcy in Dallas primarily involves filling out paperwork about your current financial situation. You’ll also have to attend a meeting and take two educational courses before your process is complete, but for the most part, you’ll be filling out paperwork for the Court. Before you begin working through your forms, you should proactively gather some financial documentation that you’ll need to reference multiple times when filing for Chapter 7 bankruptcy in Dallas. The Court is mainly interested in four aspects of your finances: what you own, what you owe, what you earn, and how you spend your income. As a result, you need to gather documents that will allow you to report these things accurately. For example, requesting a free copy of your current credit report will help you make a list of what you owe. Recent bank statements and pay stubs will help you accurately report your income and expenses.
Take Credit Counseling
Before the Cowboys, Mavericks or Rangers start their seasons, they spend months being coached to reach their full potential. Just as you can’t expect to win a championship without practice and good coaching, the Court doesn’t expect you to have a successful bankruptcy process until you learn about your options and make an informed decision about whether filing for Chapter 7 bankruptcy in Dallas is the right choice for you and your family. As a result, the Court requires filers to take a pre-filing credit counseling course during the six months before they file for bankruptcy. When choosing your course, make sure it has beenapproved by the Department of Justice for filers in the Northern District of Texas or you’ll have to participate in another (approved) course before you can file bankruptcy in Dallas.
Complete the Bankruptcy Forms
When researching how to file bankruptcy in Dallas, your eyes may bug out a little when you learn about all the paperwork involved. When you first glance at these forms, they may seem too complex to complete without an attorney’s assistance. However, it’s important to understand that each form comes with clear directions. Many people successfully file for Chapter 7 bankruptcy in Dallas on their own, which saves them a great deal of money on legal fees. As long as you feel comfortable taking this paperwork one direction at a time, you should be able to complete this process yourself.
Get Your Filing Fee
Filing bankruptcy in Dallas usually requires a filing fee. However, certain low-income filers may qualify for a fee waiver. Even if your household does not qualify for a fee waiver, you may be able to pay the fee in installments so that it becomes more manageable. The filing fee for Chapter 7 bankruptcy is “only” $335, but this amount may seem insurmountable if you are already in debt and struggling to pay your bills and put food on the table at the same time. Please don’t let the filing fee requirement keep you from exploring Dallas bankruptcy as an option. Chances are that if the fee would cause your family hardship, you’ll qualify for either a fee waiver or installation payments anyway.
Print Your Bankruptcy Forms
Have you visited any of the 28 branches of the Dallas public library recently? Because the Dallas Bankruptcy Court is behind the times and won’t allow you to file your paperwork online, this provides you with a great excuse to visit the library. If you’re like most American adults, you no longer have a functioning printer in your home. Therefore, the fact that you have to physically print off your bankruptcy forms before you can file your paperwork can seem like a pain. However, the public library has printers you can use for a minimal fee. While you’re there, you can grab a great book and encourage any kids you may bring along with you to do the same.
Go to Court to File Your Forms
Dallas is part of the Northern District of Texas. Because Dallas is so populated, there is a convenient place to file your bankruptcy forms, either in person or via postal mail, right in the city. There are many reasons to consider filing your bankruptcy paperwork in person at the Earle Cabell Federal Building at 1100 Commerce Street. Filing bankruptcy in Dallas does take time. By showing up in person, you ensure that your bankruptcy forms get processed without delay so that the automatic stay takes effect as soon as possible. While you’re at the courthouse, you can ask the clerk any questions you may have and request that any extra sets of your forms you’ve brought with you can be stamped for your records.
Mail Documents to Your Trustee
So many people file for Texas bankruptcy every year that the Court can’t handle all aspects of this process on its own. Partially for this reason, when you file for Chapter 7 bankruptcy in Dallas, aTrustee will be appointed to oversee portions of your case. Arguably, the most pressing task that a Trustee undertakes for Chapter 7 cases involves conducting a short meeting between each filer and the filer’s creditors. If this seems intimidating, don’t worry. Creditors rarely show up to these meetings. Usually, a Trustee just asks the filer questions about their finances for less than a half-hour. Before the Trustee can prepare for your upcoming meeting, you’ll need to forward them some documents (recent tax returns, pay stubs for the few months before you filed for bankruptcy, etc.) according to directions they will provide after they have been assigned to your case. Make sure to turn these documents in on time or your case could be delayed.
Take Bankruptcy Course 2
In addition to your pre-filing credit counseling requirement, the Court mandates that you take a debtor education course that has been approved by the Department of Justice for filers residing in the Northern District of Texas. You don’t have to take this course before you file for Dallas bankruptcy because it isn’t concerned with making sure that bankruptcy is a good option for you like your credit counseling course was. Instead, this class focuses on ensuring that your family’s finances benefit from the fresh start you’re getting by filing bankruptcy in Dallas. Many filers are worried that they’ll end up right back in debt after a few months post-bankruptcy. This course helps to make sure that doesn’t happen.
Attend Your 341 Meeting
The part of filing bankruptcy in Dallas that seems most intimidating to many people is the 341 meeting, or Meeting of Creditors. However, there is no real reason to stress about this event. Because creditors rarely attend the 341 meetings associated with lower-level debts, chances are that you’ll just be expected to answer your Trustee’s questions for roughly 10-15 minutes or so. Yes, you will be placed under oath before answering your Trustee’s questions, but as long as you’re prepared to tell the truth, this shouldn’t be a problem. Generally, these meetings are both predictable and routine for Trustees and filers alike, so while you should take the meeting seriously in the moment, you shouldn’t worry about it too much in advance.
Dealing with Your Car
Dallas is massive, so it’s not exactly the most pedestrian-friendly city. If you own your car and an exemption covers its full value, bankruptcy won’t affect your car ownership, so you can skip reading the rest of this section. However, if you’re still making a car payment when filing bankruptcy in Dallas, you’ll need to give your car back to your creditors or take one of two routes to keep your vehicle. Some people choose to return their car to a creditor because it means not having to pay the car-related debt moving forward. If that option won’t work, you can redeem your car at market value by making a single payment, if you have the resources to do so. Finally, you can ask the Court for permission to reaffirm your debt so that you can keep making payments per the terms of your loan.
Texas Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Dallas
Texas Bankruptcy Means Test
You may have heard that to file for Chapter 7 bankruptcy in Dallas, your household income must fall within certain income limits. If it doesn’t, you’ll need to speak with an attorney about alternative bankruptcy options available to your family. These income limits and other Chapter 7 eligibility criteria are evaluated via the Texas bankruptcy Means Test. The Texas bankruptcy Means Test helps to ensure that only low-income filers qualify for bankruptcy discharge in as few as 90 days instead of after completing a 5-year repayment plan under Chapter 13 of the Bankruptcy Code.
Median Income Levels for Texas
Texas Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Texas
Texas Fee Waiver Eligibility for Cases Filed On or After May 1, 2021
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Texas Bankruptcy Forms
The Northern District requires that filers submit a specific verification of creditors document in addition to the standard forms you need to file for Chapter 7 bankruptcy in Dallas. You may also need to access additional local Texas bankruptcy forms when special circumstances arise, like if you can’t complete your credit counseling requirement within the usual timeframe because your family is struggling with an emergency, such as relocation due to a severe weather event.
One of the most important documents you will complete when filing for Dallas bankruptcy is commonly known as Schedule C. When completing Schedule C, you will identify whether Texas bankruptcy exemptions or federal bankruptcy exemptions protect your property from being sold by your Trustee to pay back your creditors. Most low-income filers keep most or all of their property safe from this risk whether they choose to take advantage of the Texas bankruptcy exemptions model or the federal one. Nevertheless, you need to take this process seriously or your hard-earned property will remain at risk of being sold by your Trustee.