For most Houston residents, the answer is yes. Texas provides a vehicle exemption of Fully exempt if needed for work, and Chapter 13 offers additional options.
In most cases, yes. Texas allows a vehicle exemption of Fully exempt if needed for work. If you owe more than the car is worth, your equity is protected. In Chapter 13, you can keep your car regardless of equity.
Texas's vehicle exemption protects fully exempt (any vehicle needed for occupation under Tex. Prop. Code section 42.002). Vehicle equity is calculated as the fair market value minus what you owe on the loan.
Example: If your car is worth $12,000 and you owe $10,000, your equity is $2,000. This equity is fully protected under Texas law since the vehicle is needed for work.
Under 11 U.S.C. section 1325(a), if you purchased your vehicle more than 910 days (approximately 2.5 years) before filing:
Example: You owe $18,000 on a car worth $10,000. Through cramdown, you pay approximately $10,000 plus interest. The $8,000 difference is treated as unsecured debt.
If your car was recently repossessed in Houston, time is critical. Filing bankruptcy triggers the automatic stay, which can force the creditor to return the vehicle if it has not been sold yet.
Contact a Houston bankruptcy attorney immediately if your car has been repossessed or is about to be.
In most cases, yes. Texas allows a vehicle exemption of Fully exempt if needed for work. If you owe more than the car is worth, your equity is protected. In Chapter 13, you can keep your car regardless of equity.
Texas allows a vehicle exemption of fully exempt (any vehicle needed for occupation under Tex. Prop. Code section 42.002).
A reaffirmation agreement is a new contract with your car lender that keeps you personally liable for the debt after bankruptcy. You continue making payments and keep the car. The debt survives your discharge.
Redemption under 11 U.S.C. section 722 allows you to keep your car by paying the lender the current fair market value in a single lump-sum payment, even if you owe more.
In Chapter 13, if you purchased your car more than 910 days before filing, you can cram down the loan to the car's current value. You pay only the vehicle's value through your plan at a court-approved interest rate.
If your car was recently repossessed, filing bankruptcy may allow you to recover it. The automatic stay can force the creditor to return the vehicle if it has not been sold yet.
Use the free 1328(f) screener to check whether a prior discharge affects your eligibility for a new bankruptcy discharge.
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