Chapter 7 vs Chapter 13 Bankruptcy in Texas

Chapter 7 is a liquidation bankruptcy that discharges most unsecured debt in roughly three to four months but requires passing the means test, while Chapter 13 is a reorganization that consolidates debt into a three- or five-year court-supervised repayment plan and can stop a foreclosure by curing arrears over time. For Texas filers the choice is heavily shaped by the state's exemptions: Texas Property Code § 41.002 protects an unlimited-value homestead on up to 10 acres in a city or 100 acres rural (200 for a family), so many Texas homeowners keep their house in either chapter.

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