Chapter 13 Bankruptcy in Dallas, TX: Protect Your Home and Restructure Debt

For Dallas residents with steady income who need to stop a foreclosure, catch up on mortgage payments, or restructure overwhelming debt without losing assets, Chapter 13 bankruptcy provides a powerful legal framework. At Machi Wright & Associates, our Chapter 13 attorneys have designed and managed thousands of successful repayment plans for North Texas families—protecting homes, vehicles, and financial futures.

As the economic heart of North Texas and the third-largest city in the state, Dallas residents face intense cost-of-living pressures from skyrocketing housing costs, aggressive creditor lawsuits filed in Dallas County courts, and the financial fallout of a boom-and-bust economy. If you need structured debt relief while keeping your property, Chapter 13 may be the right choice. Call (817) 335-8880 for a FREE consultation.

How Chapter 13 Bankruptcy Works in Dallas

Chapter 13, known as the “wage earner’s plan,” allows Dallas residents with regular income to propose a court-approved repayment plan lasting 3 to 5 years. During this period, you make a single monthly payment to a Chapter 13 trustee, who distributes funds to your creditors according to the plan. At the end of the plan, remaining qualifying unsecured debts are discharged—permanently eliminated.

Unlike Chapter 7, Chapter 13 does not involve liquidation of assets. Instead, it reorganizes your debts into a manageable structure while you maintain your normal life, keep your property, and rebuild your financial foundation.

The Chapter 13 Timeline for Dallas Filers

1. Free Consultation & Analysis: Our attorneys evaluate your income, debts, assets, and goals. We determine whether Chapter 13 is optimal or if Chapter 7 or another strategy better fits your situation.
2. Pre-Filing Credit Counseling: You complete a required credit counseling course (available online, approximately 1 hour).
3. Petition & Plan Filing: We file your Chapter 13 petition and proposed repayment plan with the U.S. Bankruptcy Court for the Northern District of Texas (Dallas Division). The automatic stay immediately halts all collection actions, including foreclosure proceedings on your Dallas home.
4. Plan Payments Begin: Your first plan payment is due within 30 days of filing—even before the plan is officially confirmed. This demonstrates good faith to the court and trustee.
5. 341 Meeting of Creditors: Approximately 30–45 days after filing, you attend a brief meeting with the Chapter 13 trustee. We prepare you and attend alongside you.
6. Confirmation Hearing: The court reviews and confirms your repayment plan, typically within 45–90 days of filing. Once confirmed, the plan is binding on all creditors.
7. Plan Execution: You make monthly payments for 3 to 5 years. During this time, you are protected from creditor action.
8. Discharge: After completing all plan payments, remaining qualifying unsecured debts are discharged. You emerge debt-free with your assets intact.

When Chapter 13 Is the Right Choice for Dallas Residents

Chapter 13 offers distinct advantages over Chapter 7 in several common situations faced by Dallas families:

Saving Your Dallas Home from Foreclosure

This is one of the most powerful features of Chapter 13. If you have fallen behind on mortgage payments and face foreclosure on your Dallas home, Chapter 13 allows you to cure the arrears (catch up on missed payments) over the life of your 3- to 5-year plan while resuming regular mortgage payments going forward. The automatic stay stops foreclosure proceedings the moment your petition is filed with the court.

For Dallas homeowners, this can mean the difference between keeping the home your family depends on and losing it at a foreclosure auction. Our attorneys have stopped hundreds of foreclosures for Dallas County residents.

Protecting Co-Signers

Unlike Chapter 7, Chapter 13 includes a co-debtor stay that protects co-signers on consumer debts. If a family member or friend co-signed a loan for you, filing Chapter 13 prevents creditors from pursuing them for the debt as long as your plan proposes to pay that obligation in full.

Catching Up on Car Payments

If you are behind on your vehicle loan and facing repossession, Chapter 13 lets you include the arrears in your plan and resume regular payments. For vehicles purchased more than 910 days before filing, you may be able to “cram down” the loan balance to the vehicle’s current market value—potentially saving thousands of dollars.

Income Above the Chapter 7 Means Test

If your household income in Dallas exceeds the Texas median and you do not pass the Chapter 7 means test, Chapter 13 provides an alternative path to debt relief without an income cap. Many dual-income Dallas households find Chapter 13 is their best option.

Handling Tax Debts and Priority Claims

Chapter 13 allows you to pay priority debts—such as recent tax obligations, domestic support arrears, and certain other non-dischargeable debts—through the structured plan. This prevents the IRS or Texas Comptroller from taking aggressive collection action while you catch up over 3 to 5 years.

How Your Chapter 13 Payment Is Calculated in Dallas

Your monthly Chapter 13 payment is determined by several factors specific to your financial situation:

• Your Disposable Income: The difference between your monthly income and your allowed living expenses (housing, transportation, food, insurance, childcare, medical costs, and other necessities).
• Secured Debt Obligations: Mortgage arrears, car loan catch-up payments, and other secured debts that must be paid through the plan.
• Priority Debts: Tax debts, domestic support obligations, and other priority claims must be paid in full.
• Plan Duration: If your income is above the Texas median, your plan must last 5 years. If below, the minimum is 3 years, though you may extend to 5 years to lower monthly payments.
• Unsecured Debt Percentage: Unsecured creditors receive whatever remains after secured and priority debts are addressed. In many Dallas cases, unsecured creditors receive only a small percentage of what is owed, and the rest is discharged at plan completion.

Our attorneys build each plan to be affordable and sustainable. We understand that a plan you cannot maintain helps no one. During your free consultation, we calculate a realistic estimate of your monthly payment.

Texas Exemptions in Chapter 13 for Dallas Residents

While Chapter 13 does not involve liquidation, Texas exemptions still matter—they determine the minimum amount unsecured creditors must receive through your plan (the “best interest of creditors” test). Texas’s generous exemptions typically mean Dallas filers pay very little to unsecured creditors:

• Homestead: Unlimited value on your primary Dallas residence (up to 10 acres in city limits).
• Vehicles: One vehicle per licensed household member.
• Personal Property: Up to $50,000 individual / $100,000 family aggregate.
• Retirement Accounts: Fully protected—401(k), IRA, pension, and similar plans.
• Tools of Trade: Up to $50,000 individual / $100,000 family.

Chapter 13 Costs for Dallas Residents

A major advantage of Chapter 13 is how attorney fees are structured:

• Court Filing Fee: $313 (set by federal court)
• Attorney Fees: In most Chapter 13 cases, the majority of attorney fees are paid through the plan itself—meaning you pay little to nothing upfront out of pocket. The court approves all fees for reasonableness.
• Required Courses: Pre-filing credit counseling (~$15–25) and post-filing debtor education (~$15–25).

This fee structure makes Chapter 13 accessible to Dallas families who need relief but cannot afford a large upfront payment.

Chapter 13 vs. Chapter 7: Which Is Right for You in Dallas?

Choosing between chapters is one of the most important decisions in the bankruptcy process. Here is a clear comparison for Dallas residents:

• Timeline: Chapter 7 takes ~4 months; Chapter 13 takes 3–5 years.
• Foreclosure: Chapter 13 can cure mortgage arrears and save your home; Chapter 7 cannot.
• Income Limits: Chapter 7 requires passing the means test; Chapter 13 has no income ceiling.
• Asset Protection: Both use Texas exemptions, but Chapter 13 provides additional flexibility for non-exempt assets.
• Co-Signer Protection: Only Chapter 13 offers the co-debtor stay.
• Car Loan Cramdown: Only available in Chapter 13 (for vehicles owned 910+ days).
• Upfront Cost: Chapter 7 requires full attorney payment before filing; Chapter 13 fees are largely paid through the plan.
• Credit Impact: Chapter 7 stays on your report 10 years; Chapter 13 stays 7 years.

Our attorneys evaluate both options during your free consultation and recommend the chapter that best achieves your financial goals.

Frequently Asked Questions About Chapter 13 in Dallas

Can Chapter 13 stop a foreclosure on my Dallas home?

Yes—this is one of Chapter 13’s greatest strengths. The automatic stay stops foreclosure proceedings immediately upon filing. Your repayment plan then allows you to cure the mortgage arrears (catch up on missed payments) over 3 to 5 years while you resume making regular monthly mortgage payments. As long as you comply with the plan, your lender cannot foreclose.

What happens if I cannot make a Chapter 13 payment?

Life happens—job loss, medical emergencies, car repairs. If you encounter difficulty, contact our office immediately. Options include: modifying your plan to reduce payments, requesting a temporary hardship suspension, converting to Chapter 7 (if eligible), or in extreme cases, requesting a hardship discharge for the debts you have already paid. Our attorneys advocate aggressively for plan modifications when Dallas clients face unexpected setbacks.

Can I buy a car or take on new debt during Chapter 13?

You must obtain court approval before incurring new debt during your Chapter 13 plan. This includes car loans, credit cards, and personal loans. The court wants to ensure new obligations will not jeopardize your ability to complete the plan. Our team handles these motions routinely and can often obtain approval within a few weeks.

Do I have to pay all my debts back in Chapter 13?

No. You must pay secured debts (mortgage, car loan) and priority debts (recent taxes, support obligations) in full, but unsecured creditors (credit cards, medical bills, personal loans) often receive only a percentage of what is owed—sometimes as little as 0–10%. The remainder is discharged when you complete the plan.

How long does Chapter 13 stay on my credit report?

A Chapter 13 bankruptcy remains on your credit report for 7 years from the filing date—3 years less than Chapter 7. Many Dallas residents see meaningful credit improvement even before the plan is completed, as on-time plan payments demonstrate financial responsibility.

Start Your Chapter 13 Fresh Start in Dallas

If you are a Dallas resident facing foreclosure, wage garnishment, or debt you cannot manage alone, Chapter 13 bankruptcy may be your strongest legal option. At Machi Wright & Associates, we have spent over 30 years helping North Texas families protect their homes, restructure their obligations, and rebuild their lives.

Call (817) 335-8880 today or contact us online to schedule your free Chapter 13 consultation. Our office at 1521 N Cooper St, Suite 550, Arlington, TX 76011 is easily accessible from our Arlington office via I-30, typically a 25-minute drive. We serve Dallas and the entire DFW Metroplex.

Explore Your Dallas Bankruptcy Options

Choosing the right bankruptcy chapter is critical to your financial recovery. Learn more about each option available to Dallas residents:

• Overview of Bankruptcy Options in Dallas, TX — Understand all the debt relief paths available to you
• Chapter 7 Bankruptcy in Dallas, TX — Complete debt elimination for qualifying residents

Helpful Bankruptcy Resources

Our attorneys have published in-depth guides on the topics that matter most to people considering bankruptcy in Dallas:

• Pros and Cons of Chapter 13 Bankruptcy — Is a structured repayment plan right for you?
• Filing Chapter 13 After Foreclosure — Protect your home with a repayment plan
• Debt Consolidation or Chapter 13 — Compare your restructuring options
• Chapter 7 vs Chapter 13 Bankruptcy — Compare both options before filing
• Chapter 7 or Chapter 13: Which Is Right For You? — Find the right chapter for your situation
• How to Rebuild Credit After Bankruptcy — Your roadmap to financial recovery

Our Legal Services

Machi Wright & Associates serves Dallas residents with a full range of financial legal services:

• Chapter 7 Bankruptcy — Liquidation bankruptcy for debt elimination
• Chapter 13 Bankruptcy — Reorganization with a manageable repayment plan
• Foreclosure Defense — Stop foreclosure and save your home
• Wage Garnishment — End involuntary paycheck deductions
• SBA Loan Defaults — Legal options for business loan debt

Serving Communities Across the DFW Metroplex

In addition to Dallas, our bankruptcy attorneys serve families throughout North Texas:

• Bankruptcy Attorneys in Arlington, TX
• Bankruptcy Attorneys in Grand Prairie, TX
• Bankruptcy Attorneys in Mansfield, TX
• Bankruptcy Attorneys in Benbrook, TX

About Machi Wright & Associates — Dallas Bankruptcy Lawyers

Machi Wright & Associates is a Texas bankruptcy law firm led by attorneys Ted Machi and Daniel Wright. The firm’s office is located at 1521 N Cooper St, Ste 550, Arlington, TX 76011, serving clients throughout the Dallas-Fort Worth Metroplex including Dallas. With over 30 years of combined experience, the firm has helped thousands of North Texas families eliminate debt, stop foreclosure, end wage garnishment, and achieve a financial fresh start. The firm focuses exclusively on consumer bankruptcy (Chapter 7 and Chapter 13), foreclosure defense, SBA loan defaults, wage garnishment, and Social Security disability claims.

Common Questions About Bankruptcy in Dallas

How long is a Chapter 13 repayment plan? If your income is below the Texas median, your plan can be as short as 3 years. If above the median, the plan typically runs 5 years. During this time, you make one monthly payment to a trustee who distributes funds to creditors.

Can Chapter 13 stop a foreclosure in Dallas? Yes. Filing Chapter 13 immediately triggers an automatic stay that halts all foreclosure proceedings. Your repayment plan can include a schedule to catch up on missed mortgage payments over 3-5 years while you continue making current payments.

What happens if I can’t make my Chapter 13 payments? If your financial situation changes, your attorney can request a plan modification to lower payments, or in some cases, convert your case to Chapter 7. The court understands that circumstances change.