Chapter 13

• If your income is less than the Texas median, you only have to pay your creditors for three years in Chapter 13 before receiving your discharge; if above the median, you pay for five years. During those years, all your disposable income goes toward your debts. To figure disposable monthly income, add up all the money you receive except for child support, then subtract the costs of shelter, food, travel and other living expenses for you and your family. Expenses are what the federal government considers typical for your part of Texas, rather than what you actually spend.
  
  

Percentages

• Most Chapter 13 plans pay back only a percentage of an individual's unsecured debts -- credit card bills, medical bills and other debts that aren't secured by collateral. Whenever you receive an income tax refund during Chapter 13 bankruptcy, the court trustee overseeing your case will use it to pay more debt, Texas attorney Mark French says online. If the debts you're paying off include back income taxes, the IRS will probably seize the refund first. Refunds you receive in the months before you file Chapter 13 won't be affected.
  
  

Disclosure

• When you file bankruptcy, you'll have to submit complete financial information to whichever of Texas' 14 bankruptcy courts covers your part of the state. If you attempt to hide information about your income or debts, that could be grounds for the court to reject your petition. This includes changes to your income for the duration of the plan. The trustee may demand you present your income tax forms for each year you're making payments in order to check for any undisclosed income.
  
  

Chapter 7

• Unlike Chapter 13, a Chapter 7 bankruptcy only takes a few months to complete. In Chapter 7, the trustee can seize your assets to pay your creditors, after which you receive your discharge. If you've already received or claimed a refund check, your trustee may be able to seize it. Some state laws allow you to exempt some of your money from seizure, but Texas does not. Texas does, however, allow you to use federal exemption instead of state exemptions; under federal law, you might be able to protect several thousand dollars from seizure.