The Benefits of Taking the Texas State Bankruptcy Exemptions
May 15, 2023 By: Carrie Weir
Keep Most or All of Your Property in a Chapter 7 Filing in Texas
When you file for protection under Chapter 7 of the American bankruptcy laws, you have the right to permanently discharge certain debts. In exchange, you must generally relinquish some of your assets to the bankruptcy trustee, so that they can be sold, with the proceeds distributed among your creditors. You have the right to claim some of your property as exempt from seizure by the bankruptcy court. Exemptions are available under both federal and state law. You must, however, choose either the federal or the state exemptions—you cannot claim exemptions under both.
Why You Should Take the Texas Bankruptcy Exemptions
The Lone Star State has the most generous state bankruptcy exemptions in the country. While most states set pretty low limits on the amount of equity you can protect in a home or motor vehicle, here’s what you’ll be able to keep in Texas when you file for liquidation under Chapter 7 (and opt for the state bankruptcy exemptions):
- All of the equity in your home—Texas has an unlimited homestead exemption, so you generally won’t have to worry about losing your home or any of its value. The federal exemption for your home is currently $27,900. There are, however, some exceptions. If you purchased your home within 1,215 days of filing for bankruptcy, the exemption is limited to $125,000. Furthermore, the exemption only covers up to 10 city acres or 100 rural acres.
- The entire value of your motor vehicle—You can claim all equity in any car, truck or motorcycle, and you are allowed one such exemption for every licensed driver in your home. The only downside—the value of your motor vehicles must be included for calculating the personal property exemption cap. The federal motor vehicle exemption cap is currently $4,450.
- Up to $50,000 in personal property for single individuals or $100,000 for families. Under the federal exemptions, you can claim up to $1,875 for jewelry, $2,800 for tools, $14,875 for household goods and $14,875 in loan values, dividends or life insurance interest.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
Make certain a Chapter 7 filing will provide the fresh start you need.At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filingsin Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.