Texas Exemptions: What Can You Keep in a Bankruptcy?

Texas Bankruptcy Attorneys

It is a common bankruptcy myth that you will have to forfeit all your property if you file for Chapter 7 or Chapter 13 bankruptcy. That is simply not true. The purpose of the Bankruptcy Code is to help you get a fresh financial start, not to kick you while you are down. Exempt property is an asset that you get to keep that will not be seized by creditors or liquidated if you file bankruptcy.

Almost all of our clients retain all of the property that they wish to keep because it is all exempt. In fact, we regard our number one job as protecting our clients' assets. After we have done that, then we discharge as much of their debt as we can under the law. It is very uncommon that we file a case that has a non-exempt asset, and we work hard to make sure the client understands that well in advance of the filing of the bankruptcy.

Filing Bankruptcy in Texas: What Can You Keep in a Bankruptcy?

Texas is an excellent place to file bankruptcy. As a debtor filing for protection under the Bankruptcy Code in Texas, you have an election to make as to the list of exemptions you select. An exemption list is a list of property that you get to keep if you file bankruptcy.

Texas exemption laws are favorable to debtors for a number of reasons. First, the Texas Property Code exemptions are extremely generous. Additionally, the law gives you the option of choosing the Federal Bankruptcy Code exemptions if they would be more favorable in your situation.

Here are a number of important features from the Texas Property Code exemptions statute:

• Texas homestead exemption: People who file for bankruptcy in Texas are allowed to keep their primary residence. There is no dollar limit on this exemption.
• Personal property exemption: Personal property includes automobiles, home furnishings, jewelry, clothes, livestock and other common items. Single adults are allowed to keep up to $30,000 in personal property, while families are allowed to keep up to $60,000. The items are certainly not valued by their replacement value. The value of an item is what someone would pay to buy it from you in its current condition after being used by you for however long you have owned it.
• Retirement plan exemption: Qualified retirement plans such as 401(k)s and IRAs are protected under Texas bankruptcy law.
• Tools of the trade: Farming or ranching vehicles and implements are included in this exemption, as well as other tools and equipment.

To understand how Texas Property Code or the Bankruptcy Code's list of exemptions applies in your situation, it is important to talk with an experienced bankruptcy lawyer.

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Pelley Law Office, L.L.P. is recognized as a leader in the bankruptcy law arena. We have helped thousands of clients file for bankruptcy protection since 1974.  To schedule a free consultation with one of our bankruptcy law attorneys, contact our law offices. We will explain your options, and you will be under no obligation to hire us.

Pelley Law Office, L.L.P. has been named by The United States Congress in Washington, D.C. as a debt relief law firm and we help people file for bankruptcy relief under the Bankruptcy Code.

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