The worst fear people have about bankruptcy is losing all their assets to liquidation. You will be surprised to know that liquidation of assets is not as common as is believed. According to lawyers of Los Angeles based bankruptcy law firm Recovery Law Group, many states provide exemptions which can protect the majority of your assets from going under the hammer. Texas has amazingly generous bankruptcy exemptions that can protect more property than federal bankruptcy exemptions. The different categories of the exemption provided by Texas bankruptcy laws include:
- Homestead exemption
One of the major concerns people have is for their home. Texas offers an unlimited dollar amount of equity in the homestead exemption. This means that you are going to retain the roof over your head, irrespective of the equity in your home. However, the catch is that you must be a resident of the state of Texas for a minimum duration of 2 years and the area of your home must be less than 10 acres (if located in the city) or 100 acres (if present outside city limits). The area is 200 acres in case of a family (in the latter case).
- Personal property
A single person can claim an exemption for personal property worth $30,000. The amount is extended to $60,000 for a family. The items you can protect through this category of exemption include sporting equipment, home furnishings, clothing, tools, etc. Though jewelry is included in this case, the limit is capped to 25% of the personal property limit ($30,000 or $60,000). You can also exempt one vehicle per licensed member. Other items exempted under this category include tools of the trade, farming vehicle and equipment.
- Health benefits
Any equipment which is prescribed by the doctor and is essential for daily routine can be exempted under this category. Social security disability income, as well as supplemental security income, is also protected in Texas.
- Insurance policies
If a dependant is named a beneficiary, then you can protect life insurance policies too through Texas bankruptcy exemptions. There is no limit attached to the value of such policies. Few examples of policies included in this category are accident, health, life, fraternal benefit, annuity benefit, social benefit, Texas college, and state university employee benefit as well as Texas public school employee’s group benefits.
- Retirement plans
Retirement accounts such as 401(k), 403(b), certain IRAs and profit-sharing plans can be exempted up to an unlimited amount in Texas.
- Military exemptions
Military insurance benefits, active duty wages, and survivor benefits are protected through Texas bankruptcy exemption laws. Apart from this, the court also prevents any wage garnishment or collection action taken against a member who is on active duty. Benefits, insurance, and wages of veterans are also exempted except in case of paying priority non-dischargeable debts.
To know more about bankruptcy exemptions in your state, you can call 888-297-6023.