One of the most common questions people ask before filing is simple: how much debt is too much, or too little, to qualify for bankruptcy in Texas? The answer depends on which chapter you are considering, since Chapter 13 has specific debt ceilings while Chapter 7 relies on an income-based test rather than a debt limit at all. Understanding both thresholds ahead of time makes it much easier to know which path actually applies to your situation.
Chapter 13 Debt Limits in Texas
Chapter 13 eligibility depends on staying within two separate statutory ceilings: unsecured debts must fall under $526,700, and secured debts, such as a mortgage or vehicle loan, must fall under $1,580,125. These figures took effect April 1, 2025, and are set to remain in place through March 31, 2028, under 11 U.S.C. § 109(e). It is worth noting that a temporary, higher combined debt cap introduced during the pandemic has since expired, so the two separate limits above are what currently apply.
A bankruptcy lawyer can review which of your debts count as secured versus unsecured, since that classification can shift the total closer to one limit or the other. General background on how Chapter 13 works is available through the U.S. Courts Chapter 13 basics page.
Income-Based Requirements for Chapter 7
Chapter 7 does not use a debt ceiling at all. Instead, eligibility is determined through a means test that compares household income over the prior six months to the median income for a household of the same size in Texas. If income falls at or below the median, the filer generally qualifies for Chapter 7 without further calculation. If income is above the median, a second step subtracts allowed expenses to determine disposable income, which then decides whether Chapter 7 is still available.
Official income figures and calculation details are published through the U.S. Trustee Program’s means testing page. A debt relief attorney can run these numbers before filing to confirm which chapter actually fits, since the median income figures update twice a year and can shift eligibility from one filing window to the next.
Why These Thresholds Matter
Falling on the wrong side of either the Chapter 13 debt limits or the Chapter 7 means the test does not eliminate every option. It usually means a different chapter, or a different strategy entirely, is the better fit. A bankruptcy attorney reviews both debt classification and income calculations together, since the two thresholds interact more often than people expect, particularly for homeowners with a mortgage close to the secured debt ceiling or a household income that hovers right around the Texas median.
Find Out Where You Stand
At the Law Office of Joel Gonzalez, we help residents throughout Corpus Christi and the Southern District of Texas determine whether they qualify for bankruptcy in Texas under Chapter 7 or Chapter 13, reviewing income, debts, and assets case by case rather than applying a one-size-fits-all formula. We handle the calculations, explain the numbers in plain language, and help clients choose the option that actually fits their situation. If you are unsure where your finances stand, we encourage you to reach out and schedule a consultation.
