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Legal Rights and Protections After Bankruptcy in Texas

 Posted on May 12, 2023 in Bankruptcy

TX bankruptcy lawyerFiling for bankruptcy can be a complex and overwhelming process, but it can also provide relief and protection for those struggling with debt. If you’ve recently filed for bankruptcy in Texas, it is essential to understand your legal rights and protections to ensure you’re taking advantage of all the benefits available. This blog post will explore the key legal rights and protections available to Texans after bankruptcy, including the automatic stay, discharge of debts, exemptions, reaffirmation agreements, and credit reporting.

The Automatic Stay

After filing for bankruptcy, Texans can benefit from an essential legal protection called the automatic stay. It is a court order that prevents most creditor actions against you. This includes collection activities such as calls, letters, and lawsuits, which creditors must stop immediately.

The automatic stay is helpful to debtors harassed or threatened by creditors. It can also stop creditors from taking actions like wage garnishment, home foreclosure, or car repossession while in bankruptcy. However, it is important to remember that the automatic stay is not permanent and can be lifted if a creditor asks the court to lift it.

Discharge of Debts

Another critical legal right available to Texans after bankruptcy is the discharge of debts. Dealing with debts involves a court order that erases certain forms of debt, such as credit card debt, medical bills, and personal loans. This means that once your debts are discharged, you are no longer legally obligated to repay them.

While discharging debts can relieve overwhelmed debtors, it is crucial to understand that bankruptcy cannot discharge certain debts. For instance, tax debts, student loans, and child support obligations cannot be removed. The bankruptcy court may request selling some assets to repay your creditors before granting a discharge.


Under Texas law, certain types of property are exempt from liquidation in bankruptcy, meaning you can keep these assets even if you file for bankruptcy. Examples of exempt property in Texas include your homestead, a vehicle, household goods, and retirement accounts. The value of the exempt property varies depending on the type of property and your specific circumstances.

Exemptions can protect debtors concerned about losing their assets in bankruptcy. Keep in mind that the amount of exempt property is limited, and some assets may not be fully protected. Some states allow debtors to choose between state and federal exemptions, but Texas only allows debtors to use state exemptions.

Reaffirmation Agreements

A reaffirmation agreement is a contract between you and a creditor in which you agree to continue paying a debt after bankruptcy. Reaffirmation agreements can be helpful if you want to keep a specific asset, such as a car or a home, and are willing and able to continue paying the debt.

Carefully consider the consequences of entering into a reaffirmation agreement. If you default on the debt after bankruptcy, the creditor may be able to take collection action against you, such as garnishing your wages or repossessing your asset. The bankruptcy court must approve any reaffirmation agreements and may reject them if they are not in your best interest.

Credit Reporting and Credit Scores

Ensure you understand how bankruptcy can affect your credit report and score. Bankruptcy will remain on your credit report for up to 10 years and can significantly lower your credit score. However, it is essential to remember that bankruptcy is not the end of your financial life, and there are steps you can take to rebuild your credit score over time.

If you want to rebuild your credit score after bankruptcy, you can consider getting a secured credit card or asking someone to add you as an authorized user on their account. Doing so shows that you can use credit wisely and develop a favorable credit history.

Review your credit report regularly to ensure all information is accurate and up-to-date. If you find errors on your credit report, you can dispute them with the credit reporting agency to have them removed.

Contact a Fort Worth Bankruptcy Lawyer

Considering bankruptcy in Texas can be complex and overwhelming. It is crucial to seek guidance from an experienced Texas debt attorney to make the right financial and legal decision for your circumstances.


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