Texas Bankruptcy Law
Bankruptcy Courts in Texas
If you live in Texas and are thinking about filing for bankruptcy, your case will be handled in federal bankruptcy court. Texas has three bankruptcy districts, each serving specific counties:
- Northern District of Texas – Dallas, Fort Worth, Amarillo, Lubbock
- Southern District of Texas – Houston, Corpus Christi, Galveston, McAllen, Victoria
- Eastern District of Texas – Beaumont, Tyler, Sherman
- Western District of Texas – San Antonio, Austin, El Paso, Waco, Midland
You must file in the district that covers the county where you live or where your main property or business is located. Because each district has specific filing requirements, a bankruptcy attorney can help ensure your case is filed correctly.
All Texas bankruptcy courts apply the same federal bankruptcy laws, but each district also has its own local rules and procedures. Bankruptcy court decisions are guided and may be appealed to the U.S. Court of Appeals for the Fifth Circuit, which also covers Louisiana and Mississippi.
Bankruptcy Filing Trends in Texas
Texas consistently records one of the nation’s highest consumer-bankruptcy filing volumes due to its size and population. Chapter 7 filings—used to discharge unsecured debts like medical bills and credit cards—remain the most common across all four districts. Chapter 13 filings are also widely used, especially by homeowners seeking to prevent foreclosure or catch up on missed mortgage payments.
Filings are typically highest in the Southern District (Houston area) and the Northern District (Dallas–Fort Worth area), followed by the Western and Eastern Districts. These numbers reflect how many Texans use bankruptcy each year to stop collection activity, repossession, and legal actions.
Texas Exemptions — What You Can Keep
Bankruptcy does not mean losing everything you own. Texas law protects certain property, including the basic items you need to live and work. This “exempt” property cannot be taken or sold to pay creditors.
Texas allows filers to choose between state and federal exemptions. The choice depends on your individual circumstances, so speaking with an attorney can help you determine which option provides greater protection.
Below are examples of some of the most common exemptions available to Texas residents. These amounts show how much property you can protect when filing for bankruptcy. Married couples filing jointly may each claim the full amount of an exemption for property they jointly own.
Common Texas State Exemptions
| Property Type | Amount Protected (Individual / Joint) |
|---|---|
| Homestead (urban or rural) | Unlimited acreage (10 urban acres; 100 rural acres single, 200 rural acres family) |
| Homestead sale proceeds | 100% for 6 months |
| Burial plot | 100% |
| Personal property (aggregate limit) family | Up to $100,000 total value |
| Personal property (aggregate limit) single filer | Up to $50,000 total value |
| Furnishings, household goods | Included in personal property limit |
| Clothing | Included in personal property limit |
| Food and provisions | Included in personal property limit |
| Jewelry | Up to 25% of personal property aggregate limit |
| One motor vehicle per adult | Included in personal property limit |
| Tools of trade, books, equipment, commercial vehicles | Included in personal property limit |
| Farming & ranching implements | Included in personal property limit |
| Firearms (two per filer) | Included in personal property limit |
| Sports and athletic equipment | Included in personal property limit |
| Pets, livestock, and farm animals | Specific quantity limits under personal property cap |
| Health aids (professionally prescribed) | 100% |
| Alimony, support, maintenance | 100% |
| Unpaid commissions | Up to 25% of personal property limit |
| Wages (current wages not yet received) | 100% except child-support obligations |
| Workers’ compensation | 100% |
| Unemployment benefits | 100% |
| Public assistance benefits | 100% |
| Crime-victim compensation | 100% |
| Life insurance (various categories) | Often fully exempt; some categories up to $6,100 / $12,200 |
| ERISA-qualified pensions | 100% |
| IRAs | 100% |
| State, teacher, judge, firefighter, police, and public-employee pensions | 100% |
| College savings plans | 100% |
| Interest in partnership property | 100% |
| Spouse’s separate or sole-management community property | Protected against non-filing spouse’s creditors |
Common Federal Bankruptcy Exemptions
| Property Type | Federal Amount (Individual / Joint) |
|---|---|
| Homestead | $31,575 / $63,150 |
| Motor vehicle | $5,025 / $10,050 |
| Household goods (up to $800 per item) | $16,850 / $33,700 |
| Jewelry | $2,125 / $4,250 |
| Wildcard | $1,675 + up to $15,800 unused homestead |
| Tools of trade | $3,175 / $6,350 |
| Cash value of life insurance | $16,850 / $33,700 |
| Health aids | 100% |
| Social Security, unemployment, public assistance | 100% |
| Veterans’ benefits | 100% |
| Pensions & retirement accounts | 100% |
| Personal injury awards | $31,575 / $63,150 |
| Wrongful death and support-related awards | Amount needed for support |
Choosing between state and federal bankruptcy exemptions can significantly affect what property you can keep. A bankruptcy attorney can help determine which option best protects your home, car, and personal assets.
Steps and Local Requirements
Credit counseling. Before filing, you must complete a credit counselling course from an approved provider. A second debtor education course is required before discharge.
Means test. To qualify for Chapter 7, your income must be below Texas’s median income or pass a means test comparing your income and expenses.
Filing fees. The filing fee is $338 for Chapter 7 and $313 for Chapter 13. You can request to pay in installments or apply for a waiver if unable to pay in full.
Meeting of creditors. About a month after filing, you’ll attend a brief “341 meeting.” This meeting is not held in front of a judge. Instead, a bankruptcy trustee appointed by the court will verify your identity and ask a few questions about your financial situation and paperwork.
In Texas, meetings may be held virtually or in person in the city where your case is filed
(e.g., Houston, Dallas, San Antonio, Austin, El Paso, Lubbock).
Local rules and forms. Each of Texas’s four bankruptcy districts has its own local rules, administrative procedures, and required forms. Working with an attorney helps ensure full compliance.
What This Means for You
Filing for bankruptcy in Texas can provide immediate relief from lawsuits, foreclosures, wage garnishments, and other collection actions.
Most filers keep their homes, vehicles, and personal property. Because bankruptcy involves complex eligibility rules, strict deadlines, and local procedures, it’s best to consult an experienced bankruptcy attorney before filing.
An attorney can help you:
- Decide whether Chapter 7 or Chapter 13 is best for your situation
- Choose exemptions that best protect your property
- Complete credit-counseling and education requirements
- File all forms accurately and meet local deadlines
With proper preparation and legal guidance, bankruptcy can offer a fresh financial start and a path toward long-term stability.
U.S. Bankruptcy Court – Northern District of Texas
Federal Circuit: Fifth Circuit
Primary Locations: Dallas, Fort Worth, Amarillo, Lubbock
Where You File Depends on Where You Live
The Northern District covers the Texas Panhandle, northern counties, and the Dallas–Fort Worth region. Counties include Dallas, Tarrant, Collin, Denton, Lubbock, Taylor, Amarillo region counties, and many others.
A bankruptcy attorney can help confirm your filing location.
Recent Filing Statistics
The Northern District consistently records one of the highest filing volumes in the state, driven by the population of the Dallas–Fort Worth metroplex. Chapter 7 filings are most common, with strong Chapter 13 filing rates in suburban counties.
U.S. Bankruptcy Court – Southern District of Texas
Federal Circuit: Fifth Circuit
Primary Locations: Houston, Galveston, Corpus Christi, Victoria, McAllen, Laredo
Where You File Depends on Where You Live
The Southern District covers southeast and south Texas, including Houston, the Coastal Bend, and the Rio Grande Valley.
Recent Filing Statistics
This district often leads the state in consumer bankruptcy filings, with high Chapter 13 activity in the Houston metro area, where many homeowners use repayment plans to stop foreclosure.
U.S. Bankruptcy Court – Eastern District of Texas
Federal Circuit: Fifth Circuit
Primary Locations: Beaumont, Tyler, Sherman
Where You File Depends on Where You Live
The Eastern District serves east-Texas counties bordering Louisiana and Arkansas, including Jefferson County, Smith County, and surrounding regions.
Recent Filing Statistics
Filings are moderate but steady. Most cases are Chapter 7, with Chapter 13 filings common among households dealing with secured debt or vehicle arrears.
U.S. Bankruptcy Court – Western District of Texas
Federal Circuit: Fifth Circuit
Primary Locations: San Antonio, Austin, El Paso, Waco, Midland
Where You File Depends on Where You Live
The Western District covers central, west, and southwest Texas, including Austin, San Antonio, the Hill Country, and the El Paso region.
Recent Filing Statistics
Filings are highest in San Antonio and Austin. Chapter 7 filings dominate, but Chapter 13 remains popular with homeowners seeking to reorganize past-due mortgage and tax debts.
