Life can throw an unexpected curveball — a sudden job loss, a medical emergency, or a severe downturn in business can leave you scrambling to keep up with payments, calls from creditors, and confusing financial decisions. If you’re considering filing for bankruptcy (whether under Chapter 7, Chapter 13, or another option) but haven’t filed yet, this in-between period is critical.
What you do now can impact how smoothly your case goes, how much protection you gain, and your financial recovery afterward.
At Baker & Associates, we’ve helped many clients in the Greater Houston, Bryan/College Station, and Rio Grande Valley areas (McAllen, Texas and Brownsville, Texas) navigate this phase. Below are five key steps you should take before filing — so you emerge from the process with the best possible fresh start.
1. Understand When the Automatic Stay Starts — and Its Limits
Once you file a bankruptcy petition, the automatic stay goes into effect and immediately halts most collection actions, garnishments, and foreclosure proceedings. However, until you actually file, you do not yet have that protection.
Action steps:
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Avoid large new purchases on credit that you cannot realistically repay.
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Be cautious about using credit cards for non-essential expenses just before filing.
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Understand that creditors may still call or proceed with lawsuits or repossessions until your case is filed.
Keep in mind that the automatic stay does not protect against every type of debt. Certain tax obligations, child support, and some other obligations may still proceed. It’s important to coordinate with your Houston bankruptcy attorney so the timing of your filing is as effective as possible.
2. Stabilize Your Income and Expenses: Build Your “Financial Snapshot”
Whether you are filing individual or business bankruptcy, the court will want a clear picture of your income, expenses, assets, and debts. The better you organize this now, the fewer surprises later.
Action steps:
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Gather recent pay stubs, bank statements, and tax returns.
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Collect information on assets such as vehicles, real estate, and retirement accounts.
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Prepare a realistic monthly budget that reflects your actual expenses.
If you own a business, track income and expenses carefully. Unexplained transfers or sudden asset depletion may raise questions in your case. Your attorney can help you understand what is normal and what might create problems.
3. Protect Your Household Budget: Focus on Needs, Not Wants
While you are moving toward a bankruptcy filing, your first priority should be keeping your household stable. That means focusing your available funds on essential expenses — not on keeping every creditor happy.
Prioritize essentials such as:
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Housing (rent or mortgage)
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Utilities
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Food and basic household supplies
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Transportation for work and school
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Necessary medical care and prescriptions
Additional tips:
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If possible, build a small emergency cushion so you are not forced to use high-interest credit cards again.
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Talk openly with your family about temporary cutbacks (subscriptions, dining out, travel) while you work toward a financial reset.
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Avoid raiding retirement accounts without legal advice — this can create tax issues and may not be necessary.
4. Know How Current Rules and Exemptions May Affect You
Bankruptcy laws include exemptions — protections that allow you to keep certain property. Texas offers strong protections in areas like homestead and personal property, but the exact amounts and rules can change over time.
As we’ve discussed in other posts on the Baker & Associates bankruptcy blog, recent adjustments to thresholds and means-testing rules can affect which chapter you qualify for and how your payment plan is calculated.
Action steps:
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Review your assets with your attorney to determine which are likely to be exempt.
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Before selling or transferring any property, speak with a bankruptcy lawyer to avoid creating “preference” or “fraudulent transfer” issues.
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Ask whether changes in your income or timing your filing differently could affect your eligibility for Chapter 7 or the terms of a Chapter 13 plan.
5. Choose the Right Attorney and Be Honest About Your Situation
Bankruptcy is a powerful tool, but it is also a detailed legal process. Working with an experienced Houston bankruptcy lawyer can make a major difference in how smoothly your case goes and in how much protection you receive.
A good bankruptcy attorney will:
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Explain the differences between Chapter 7, Chapter 13, and other options available to you.
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Provide a clear checklist of documents to gather and deadlines to meet.
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Help you deal with creditor calls and pending lawsuits.
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Guide you on rebuilding credit and managing finances after your discharge.
The most important thing you can do is be completely honest about your income, assets, and debts. Hiding information or waiting until the last minute can put both your case and your property at risk.
Thinking About Bankruptcy? Talk to Us Early.
Filing for bankruptcy is not a sign of failure — it can be a smart, strategic decision to protect your family, your home, and your future. The steps you take before filing can set you up for a smoother process and a stronger fresh start.
If you are in or near Houston, Bryan/College Station, or the Rio Grande Valley (McAllen, Texas and Brownsville, Texas) and are facing overwhelming debt, Baker & Associates is here to help. Call us at (713) 979-2279 or use our contact form to discuss your options with an experienced bankruptcy attorney.