When you file for bankruptcy, the state the debtor files in gives debtors the opportunity to keep certain assets using what are called “exemptions”. Exemption laws are designed to allow a debtor to keep property that debtors will need in order to maintain a job and household. Exemptions vary by state, and some states allow you to use state exemptions or federal exemptions.. In Texas, you get to choose between state or federal bankruptcy exemptions. However, since Texas bankruptcy property exemptions are one of the most generous in the United States, in most cases, it’s more beneficial to use Texas State exemptions over federal exemptions.
There is also property you cannot keep called nonexempt property. In a Chapter 7 bankruptcy, non exempt property will be sold to pay creditors and in a Chapter 13, you can choose to keep non-exempt property, but pay the value of said property, nondischargeable debt, and disposable income through the repayment plan for creditor benefit. It is rare for a Texas bankruptcy filer to have non exempt property.
Texas Bankruptcy Exemptions
Homestead: Texas offers unlimited homestead exemption except by the amount of acres and based on the location of the property. If your residence is on 10 acres or less in a city, town or village you’ll get unlimited homestead exemption. This is also the case if your residence is on 100 acres of less in the country or 200 acres if you have a family. If you sell your house, the proceeds are exempt for six months after the sale.
Personal Property: Your personal property can be exempt if it doesn’t exceed a total of $100,000 or $50,000 if you’re a single adult without a family. This means that if all your personal property is over $100,000 and you’re the head of the family you won’t keep all of your property. On the other hand, a single adult’s exempt personal property can’t surpass $50,000. Personal property includes sporting equipment, up to two firearms, some jewelry, home furnishings including family heirlooms, several animals, food, clothing, and sacred books.
Vehicle: The law allows you to exempt the entire value of one motor vehicle per licensed household member. If you have a family member who doesn’t have a license, the vehicle can still be exempt if the unlicensed person relies on someone else to drive the vehicle.
Wages: Wages are exempt for personal services, except for the enforcement of court-ordered child support payments.
Pension/Retirement: A majority of tax-exempt pensions and retirement accounts are exempt, even if you choose the Texas exemptions instead of federal ones. These pensions and accounts include particular pensions or retirement funds that receive special tax exemptions under the U.S. Tax Code.
Get Proper Legal Assistance from Experienced Bankruptcy Lawyers
Do you need assistance filing for bankruptcy? Whether you’re filing for Chapter 7 or Chapter 13, bankruptcy could mean a fresh start for you. At Acker Warren, P.C. you’ll find superior legal advice for bankruptcy cases. We’ll be more than happy to help you out in your path to financial freedom.