In case you find your financial future in doldrums and are considering filing for bankruptcy under Chapter 7 or Chapter 13, it is important that you are aware of how the process works. Most of the times, people assume the worst when it comes to bankruptcy. Unlike popular misconception that you will end up losing everything you own, bankruptcy allows a number of protections which allows bankruptcy filers to protect more of their property or pay less amount to unsecured creditors. The Texas exemption laws contain many such protections for the benefit of filers.
What are Bankruptcy Exemptions?
According to Sacramento based law firm Recovery Law Group when an individual file for bankruptcy, anything and everything they own becomes a part of an estate. In case of Chapter 7 filing, the bankruptcy trustee can sell entire estate property to pay off creditors, while in case of Chapter 13, the filer is indebted to pay as per the repayment plan, a part of what the creditors would have received in a Chapter 7 filing. State Bankruptcy Exemptions are available through which you can take some property out of the bankruptcy estate. These exemptions are separate from the list of federal exemptions. In case a married couple files for bankruptcy jointly, they can double the exemption amount for the jointly-owned property.
Exemptions in the State of Texas
• Homestead Exemptions: residence on 100 acres or less in the countryside or 10 acres or less in the city are exempted. In case the house is sold, the proceeds are exempted for 6 months after the sale.
• Personal Property Exemptions: $50,000 for a single adult without a family and $100,000 worth property for a family person can be exempted. The list of property which can be exempted includes animals, clothing and food, sporting equipment, family heirlooms, up to 2 firearms, home furnishings, health aids, burial plots, health saving accounts and jewelry (limited to 1/4th of the exemption).
• Motor Vehicle Exemption: The entire value of one vehicle per licensed member of the filer’s house can be exempted.
• Pension or Retirement Account Exemption: Majority of exempted retirement accounts and pensions will be released in bankruptcy.
In case you have more questions regarding the exemptions available during the bankruptcy process, it is important to consult bankruptcy attorneys. They can help guide you through the process for better financial beginnings.