How Texas Bankruptcy Law Can Help Stop Eviction

When facing eviction in Texas, many residents may feel overwhelmed and helpless. However, Texas Bankruptcy Law can provide a legal pathway to stop eviction proceedings, offering individuals a chance to reorganize their debts and secure their housing situation. Understanding how this legal framework works can empower tenants to navigate through challenging times.

Under Texas law, tenants facing eviction due to unpaid rent may find relief through Chapter 7 or Chapter 13 bankruptcy. Each chapter has distinct mechanisms that can help halt eviction and provide a fresh start for those struggling financially.

Chapter 7 Bankruptcy: This is often referred to as “liquidation” bankruptcy. It allows individuals to wipe out most unsecured debts, including credit card bills and some medical debts. When a tenant files for Chapter 7 bankruptcy, the automatic stay kicks in immediately. This stay halts any eviction proceedings for 30 days, preventing landlords from pursuing legal actions to remove tenants from their homes during this time. In some cases, if rent is owed for the previous 90 days, the landlord may still proceed with eviction after the 30 days, but tenants can use this time to explore payment options or negotiate with their landlord.

Chapter 13 Bankruptcy: Known as “reorganization” bankruptcy, Chapter 13 allows individuals with regular income to create a repayment plan to pay back all or part of their debts over three to five years. If a tenant is behind on rent, filing for Chapter 13 can be particularly beneficial. The automatic stay not only halts eviction but allows tenants to keep their homes while they reorganize their debts. Tenants can include back rent in their repayment plan, allowing them to pay it off over time and prevent eviction altogether.

It’s important to note that the effectiveness of declaring bankruptcy in halting eviction can depend on a few factors, such as the type of eviction being pursued and when the bankruptcy is filed in relation to the eviction process. For example, if a judgment for eviction has already been issued, bankruptcy may not suffice to stop the eviction unless the tenant also addresses these judgments through a bankruptcy plan. Consulting with an attorney who specializes in bankruptcy law can help clarify the best approach based on individual circumstances.

Another crucial consideration is that tenants should continue to pay their rent after filing for bankruptcy. Failing to do so may lead to the landlord asking for permission to proceed with eviction despite the bankruptcy filing. This is crucial for maintaining tenancy and ensuring the tenant's rights are protected under the law.

In summary, Texas Bankruptcy Law provides valuable resources for tenants facing eviction. By understanding the options available through Chapter 7 and Chapter 13 bankruptcy, Texas residents can take proactive steps toward securing their housing situation and managing their financial responsibilities effectively. It is always advisable to seek professional legal counsel prior to filing for bankruptcy to fully understand the implications and processes involved.