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The Little-Known "Super Discharge" in Texas Chapter 13 Cases
Many people consider Chapter 7 bankruptcy as the easiest, fastest way to eliminate debt. Fewer people are aware that Chapter 13 bankruptcy can sometimes wipe out a wider range of debt under an expanded discharge, known as the "Super Discharge." Under certain conditions, Chapter 13 bankruptcy can eliminate many of the obligations that survive Chapter 7, including some divorce-related payments, older tax debts, and even penalties tied to willful property damage.
Small business owners, families, and individuals caught between unmanageable debt and repayment demands should consider this often-overlooked feature of Chapter 13, which can, in many cases, serve as a financial lifeline. To determine whether you are eligible for a Chapter 13 super discharge, speak to an experienced Fort Worth, TX Chapter 13 bankruptcy lawyer.
What Is Chapter 13 "Super Discharge?"
A Chapter 13 super discharge refers to a set of debts that can be discharged or erased in a Chapter 13 bankruptcy case, as compared to a Chapter 7 bankruptcy case. The three-to-five-year repayment plan required in Chapter 13 must be completed to qualify for the elimination of this wider array of debts. Some debts, such as federal tax debt and debts resulting from malicious injury or fraud, are non-dischargeable under Chapter 7, but may be dischargeable under a Chapter 13 super discharge.
When Credit Card Debt May Not Be Dischargeable in Chapter 7
If you have decided to file for Chapter 7 bankruptcy, you may expect a clean slate when all is said and done, especially when it comes to credit card debt. Although it is true that most unsecured debts will be wiped out by Chapter 7 bankruptcy, there are certain unique situations in which credit card debt can survive bankruptcy. Courts typically scrutinize recent spending, cash advances, and fraud-related purchases during a Chapter 7 bankruptcy filing.
It is important to know what types of credit card debt might not be removed under Chapter 7, so there are no unpleasant surprises on your way to a fresh financial start. Having an experienced and knowledgeable Dallas, TX Chapter 7 bankruptcy attorney by your side throughout the process can help ensure that your bankruptcy will wipe out all your unsecured debt.
Buying a Home in Texas After Bankruptcy: How Long Must I Wait?
Filing for bankruptcy in the state of Texas does not have to mean the end of your dreams of owning a home. While most people assume that filing for Chapter 7 or Chapter 13 personal bankruptcy means they will never qualify for a mortgage, this is not necessarily the case. Although bankruptcy will undoubtedly affect your credit, there is a path to buying a home following bankruptcy.
When you have a clear understanding of the loan requirements and waiting periods, and the steps you need to take to rebuild your financial profile, home ownership can become a reality. An experienced Arlington, TX consumer bankruptcy lawyer can help you get back on track financially while working toward purchasing a home.
Bankruptcy’s Impact on Credit Scores and Mortgage Eligibility
A bankruptcy will definitely impact your credit score, with the effect lasting from seven (Chapter 13) to 10 years (Chapter 7). Depending on your credit health before filing for bankruptcy, you can likely expect a credit score drop of at least 100 points. Although the record of bankruptcy remains for years, the negative impact lessens significantly over time. A positive credit history can begin to be rebuilt within one to two years with responsible financial behavior. Furthermore, lenders consider an individual’s overall credit history, rather than just his or her bankruptcy status.
Bankruptcy and Texas Oil Royalties: Are They Protected Assets?
In 2024, the Texas Oil and Gas Association paid a record 27.3 billion dollars in royalties and state and local taxes. A large portion of these billions of dollars was distributed to individuals across the state, who typically receive 12-25 percent of production revenue annually in the form of royalties. These royalties are derived from ownership of the mineral rights beneath the land where oil is found.
While these oil and gas royalties are income, they can also represent a family’s legacy and long-term financial security. What happens when an individual receiving Texas oil royalties files for bankruptcy? Can creditors seize the payments, or are they protected under Texas bankruptcy law? The answer is: it depends.
Texas is known for having some of the most generous bankruptcy exemptions in the country; however, whether oil royalties fall under these exemptions will depend on several factors, including how they are classified and the language in the oil and gas lease. To understand these factors, consulting with an experienced Arlington, TX bankruptcy attorney can be highly beneficial.
What if You Were Less Than Truthful on Your Bankruptcy Forms?
Filing for bankruptcy in Texas can be a beneficial way to achieve a fresh financial start, but being honest throughout the process is crucial. Bankruptcy paperwork requires full disclosure of your financial history, including assets, debts, and income. If you fudge the numbers or intentionally leave things out, you could face serious consequences, even if the mistakes or omissions were not intentional.
So, what happens if you were less than honest on your Texas bankruptcy forms, or you realize after the fact that you inadvertently filed with inaccurate information? The best course of action is to discuss the issue with your Wise County, TX bankruptcy lawyer. It could be possible for your attorney to file amended schedules to correct any inadvertent errors or to speak to the trustee as a show of good faith.
What Are Some Common Ways People Are Less Than Truthful in Bankruptcy Filings?
The bankruptcy process is based on transparency and fairness. Filings are made under penalty of perjury, which every bankruptcy filer should take very seriously. Yet, according to a 2021 University of California report, approximately 11.49 percent of bankruptcy filings in 2020 likely involved fraud. The most common ways people seek to "game" the bankruptcy system include:
Can You Use Bankruptcy to Deal with IRS Debt in Texas?
In the state of Texas, where there is no state income tax, residents can find at least some relief from tax problems. However, just because there is no state tax does not exempt you from owing federal taxes to the IRS.
It can be extremely stressful to owe federal income tax, and the penalties can be relentless. If you feel that you will never be able to repay the IRS the money you owe, and it keeps you up at night, you may wonder whether bankruptcy could eliminate your IRS debt.
The answer to that question is far from simple and can depend on the type of tax owed, how old the debt is, and which type of bankruptcy you intend to file. Consulting with a knowledgeable Dallas, TX bankruptcy attorney should be your first step in your quest to eliminate debt and achieve a fresh financial start.
Could Bankruptcy Be a Useful Tool for Eliminating Some IRS Debt?
Bankruptcy can be useful in eliminating some IRS debt, but be aware that what you can eliminate will depend on the specific circumstances and the type of tax debt. Under specific conditions, some federal income tax debts can be discharged through Chapter 7 bankruptcy.
Medical Debt and Retirement: A Senior’s Guide to Bankruptcy
Between 1991 and 2016, bankruptcy filings among individuals aged 65 to 74 increased by 204 percent. This huge increase is largely due to the rising costs associated with medical expenses. The cost of healthcare, including insurance premiums, deductibles, and out-of-pocket expenses, disproportionately impacts seniors who may have chronic illnesses, insurance coverage gaps, and fixed incomes.
Many Texas seniors are finding that their medical bills are turning their retirement years into a financial nightmare. Social Security payments are unlikely to keep up with medical costs, and while bankruptcy is a choice few seniors want to consider, it can help you protect your assets while regaining financial stability in your golden years. Consulting with a knowledgeable Dallas, TX bankruptcy lawyer can help answer your questions and determine whether bankruptcy is the best option for you.
When To Choose Chapter 13 Over Chapter 7 Bankruptcy?
If you have a great deal of debt, bankruptcy can offer a fresh start. But when it comes to choosing whether to file Chapter 7 or Chapter 13 bankruptcy, the decision depends largely on the circumstances of your case, particularly the type of debt you have. The reason for this is that both Chapter 7 and Chapter 13 help people get rid of debt, but they work in very different ways.
Understanding when Chapter 13 might be the better choice is key to protecting your assets and planning for a better financial future. An experienced Wise County, TX bankruptcy attorney can advise you on the most appropriate route for you.
What Is the Difference Between Chapter 13 and Chapter 7 Bankruptcy?
Chapter 7 is often called the "liquidation bankruptcy" because at the end of the process wipes out most unsecured debts (such as credit cards or medical bills), usually within three to five months. However, it may require you to give up certain non-exempt assets to pay creditors.
Can Bankruptcy Help With Payday Loan Debt?
Most people turn to payday loans during financial emergencies, expecting to repay them quickly with their next paycheck. But when these short-term loans lead to a recurring cycle of debt with crushing interest rates, you might find yourself trapped under mounting debt. If this sounds familiar, Chapter 7 bankruptcy might offer relief. An experienced Dallas, TX bankruptcy attorney can advise you on your rights and help determine if filing for bankruptcy is the right solution for your payday loan debt.
Why Are Payday Loans Problematic?
While they are marketed as quick solutions for people facing temporary financial shortfalls, payday loans come with extremely high interest rates. The typical payday loan has an APR of over 300. This means that by the time payday arrives, you may find yourself unable to repay the full loan amount plus fees.
How Does a Bankruptcy Attorney Get Paid?
It is safe to say that if you are filing for bankruptcy, or thinking about it, you are probably experiencing serious financial hardship and owe too much debt for comfort. You may be thinking that the last thing you can afford right now is an attorney to handle your bankruptcy case. You may also be curious about how bankruptcy attorneys get paid, given that everyone who files for bankruptcy is in a similarly bad financial situation.
The answers to these questions depend on the type of bankruptcy you are filing, but in general, filing for bankruptcy can be cheaper than continuing to accrue debt, and there are manageable ways to pay for your attorney. You should bring these questions up during a complimentary consultation with your Arlington, TX bankruptcy attorney, who can explain the costs of bankruptcy and legal representation.
From our office in Arlington, we serve clients throughout Tarrant County, Dallas County, Parker County, Denton County, Wise County, Dallas, Fort Worth, Irving, Grand Prairie, Bedford, Keller, Euless, Richland Hills, North Richland Hills, Mansfield, Coppell, Kennedale, Las Colinas, Burleson, Azle, Saginaw, Haltom City, Watauga, Southlake, Benbrook, Colleyville, Grapevine, Crowley, Aledo, Roanoke, Trophy Club, Carrollton, Farmers Branch, Richardson, and Hurst, as well as other communities across North Texas.
Results listed are not a guarantee or indication of future case results.
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