Must You Relinquish Certain Property To Satisfy Creditors?
You’ve lost your job or your company has significantly cut back your hours. Or you’ve suffered an injury or illness that keeps you from working or requires extensive medical care, which may not be covered by insurance. Or you’ve gone through a divorce, or your finances have simply gotten out of control.
You’ve considered seeking a fresh start with a bankruptcy petition, but you’re worried about whether you’ll have to forfeit some or most of your property. Can you lose assets in a Texas bankruptcy proceeding? What are the chances you’ll have to relinquish property to satisfy your creditors.
When Must You Give Up Property in Bankruptcy?
As a general rule, the relinquishment of property happens only in Chapter 7 bankruptcies, which allow for the permanent discharge of certain debts. In exchange for the right to discharge debt, the bankruptcy trustee may sell some of your non-exempt assets to help repay your creditors. In a Chapter 7 proceeding, you may choose the exemptions available under either federal law or Texas law. You may not take some from each.
Fortunately, for persons filing Chapter 7 in Texas, the state exemptions are among the most generous in the country:
- A homestead exemption for up to 10 acres in an urban area and 100 acres in a rural setting
- A personal property exemption of $50,000 for individuals and $100,000 for couples, including up to two firearms, clothing, food, jewelry, sports equipment, home furnishings, and burial plots
- The entire value of one motor vehicle for each household member with a driver’s license
- Most retirement and pension accounts
Because of these generous exemptions, most Chapter 7 petitions in Texas do not involve the loss of assets.
Contact an Experienced Rockwall, TX, Chapter 7 Bankruptcy Lawyer
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment to discuss your rights and options in bankruptcy, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.
