When you file for bankruptcy in the state of Texas there are a number of exemptions that you will be allowed when filing for Chapter 7 or Chapter 13 bankruptcy. These exemptions can help you to protect your property and can help you pay less money to your unsecured creditors.
Understanding Exemptions
Bankruptcy exemptions in Texas are among the most generous in the USA. At the time you file for bankruptcy, all your possessions are gathered together on paper, as well as anything that is owed to you, and these will comprise your total assets. If you are filing for Chapter 7 bankruptcy, the trustee is allowed to sell your assets in order to recover money for your creditors. By using the allowed exemptions set out by state law, you can protect and keep a large amount of your assets.
Two Types of Exemptions
Federal laws allow for a large list of exemptions for your property; up to a defined dollar amount. Texas laws allow you to choose between the exemptions allowed federally or as defined by the state. You are not permitted to use both together. In Texas, couples are allowed to file together and thereby double their exemptions.
The Homestead Exemption – Texas
If you live in a city, village or town the state allows you a homestead exemption if your property is on 10 acres or less. In other areas of the state the acreage allowed is 100 or doubled if two families reside on the same property. If you decide to sell your home, any profits from the home are exempt for a period of six months after the sale.
Motor Vehicle Exemptions – Texas
In Texas, the law states that vehicles are exempt in a bankruptcy filing. For every member in the household who has a driver’s license, one vehicle is exempt. If a household member does not have a driver’s license and owns a vehicle that is operated on their behalf by another person with a license, then that vehicle is also exempt. This most often applies in the case of people with disabilities.
Personal Property Exemptions – Texas
In Texas, personal property that is not considered real estate is subject to a number of exemptions. For a single person the exemptions cannot exceed $30,000, and for a joint bankruptcy filing the amount is doubled. Some items will have certain limitations imposed and your Texas bankruptcy lawyer will discuss these with you. Two other areas that will require more detailed examination are pension and retirement accounts and life insurance exemptions.
Bankruptcy laws are often revised and it’s important to consult with a lawyer who specializes in bankruptcy law. There are many other exemption constraints that may apply in your case which you’ll review with your lawyer, in order to decide which type of bankruptcy is appropriate for your situation.