The biggest misconception people have about filing for bankruptcy is that they will lose everything they own. In some cases, people may be required to sell some of their assets in order to pay creditors, but this is not always the case. Texas is one of a few states that have many property exemptions, which can protect people’s assets.
Texas Homestead Exemption
Most often, a person’s home is their biggest asset and their biggest concern when filing for bankruptcy. Texas bankruptcy laws allow for an individual to protect their home during bankruptcy, with no cap on the maximum value of the home. The law requires filers to have resided in Texas for at least 2 years in order to be eligible for this exemption. However, the federal bankruptcy laws allow for an individual to protect their home, up to $125,000 if they are not eligible the Texas homestead exemption.
Texas Personal Property Exemptions
People are usually surprised to find out how much of their personal property may also be exempt from liquidation during bankruptcy. A single adult filing for bankruptcy is allowed to claim personal property up to an exemption cap of $30,000 and a family up to $60,000. All home furnishings, including hierlooms and antiques, are exempt under the Texas bankruptcy exemptions laws. Items of both monetary and sentimental value, such as jewelry is also protected ,but is limited to 25% of the exemption cap value. The Texas bankrtupcy exemptions also allow for cars to be protected from seizure, up to one per licensed person in the family. Many other types of assets such as insurance benefits, some wages and retirement plans may also be protected under the Texas bankruptcy exemptions.