• Although bankruptcy procedures are basically the same in all states, the income levels you need to have to qualify for Chapter 7 bankruptcy are specific to Texas. In addition, if you qualify, how much of your assets you get to keep will also be governed by Texas state law.

• Chapter 7 bankruptcy is the type of bankruptcy most consumers think of when they hear the word bankruptcy. It entails selling off your assets and distributing the proceeds to your creditors, who then forgive the remaining debt. If you don't qualify for Chapter 7 bankruptcy, you may be able to file under Chapter 13, which, while it doesn't wipe away your debts, creates a revised payment schedule that your creditors are required to accept.

What Debts Are Not Eliminated by Chapter 7 Bankruptcy in Texas

• While Chapter 7 bankruptcy allows you to wipe the slate clean of most debts, there are obligations that will not be modified by a bankruptcy judgment. This generally include:

1. Alimony and child supportLawyers.com: Bankruptcy inTexas
2. Debts owed to, or guaranteed by, government agencies, including taxes, fines, and student loansLawyers.com: Bankruptcy inTexas
3. Debts associated with large purchases (over $550) of luxury items within 90 days of filingLawyers.com: Bankruptcy inTexas
4. Cash advances for more than $825 that were taken within 70 days of filingLawyers.com: Bankruptcy inTexas
5. Obligations arising from as a result of fraudulent or illegal activityLawyers.com: Bankruptcy inTexas

• In order to use Chapter 7, also known as straight bankruptcy or liquidation, your income must be below the Census Bureau determined median for similarly sized families in Texas.

1. Single individual: $36,285Lawyers.com: Bankruptcy inTexas
2. Two person family: $51,355Lawyers.com: Bankruptcy inTexas
3. Three person family: $53,803Lawyers.com: Bankruptcy inTexas
4. Four person family: $61,511Lawyers.com: Bankruptcy inTexas

• Residents of Texas can elect to be governed by federal exemptions, or can elect to use the Texas exemptions. Which alternative you choose affects what assets, and how much, you can keep, and what needs to be liquidated and distributed to your creditors. The decision can be complicated, and you should hire a bankruptcy attorney to help you determine which exemption alternative best meets your needs.Lawyers.com: Bankruptcy inTexas