Overview of Texas Bankruptcy Exemptions


When you file for bankruptcy in Texas, there are certain types of property and assets that can be protected from creditors. While there are some assets that cannot be kept separate in a bankruptcy filing, you can use some exemptions to keep specified types of property.

Property Exemptions in Texas

After filing for bankruptcy, the court creates an estate of all property, both what is in your possession and what you are owed. Depending on the type of bankruptcy, this property may be sold off to pay back debts or be used to determine what monthly costs you can afford to pay back.

Choosing to exempt property can protect these assets and reduce the total amount that is owed back to creditors. When choosing to exempt, you have the option between federal or state exemptions, but not both. Working with a bankruptcy attorney can help determine which route will be to your greatest financial benefit.

Some of the exemptions a person may be able to claim on their bankruptcy filing include:

  • Homestead property up to one acre in a town or city or 100 acres elsewhere
  • Personal property, such as livestock, pets, and burial plots
  • Family heirlooms
  • Insurance plans and policies
  • Pensions and wages
  • Public benefits such as unemployment and worker's compensation
  • Job-related tools

Those filing for bankruptcy with a spouse will be able to exempt double the amount of any property owned jointly. However, whether a person is filing single or jointly, there is an exemption limit. Exemption limits refers to the amount of equity that a person has on the property. For example, if a person's home is valued at $300,000 and they have paid off $200,000, the total equity of the home is $100,000. If the equity is covered by a loan and payments are up to date, then payments can continue to be made on the loan and the property may be kept out of bankruptcy dealings. If the equity is too high, the property may no longer be exempted.

Determining what property can be exempted in a bankruptcy filing and whether to use state or federal exemptions should be done with the help of a dedicated bankruptcy attorney. The Law Office of Mark B. French is well-versed in bankruptcy law and knows the full extent of exemptions in the state of Texas. Give our firm a call to learn about what exemptions you may qualify for in your bankruptcy filing.

Share To: