What Assets Can You Keep in a Texas Chapter 7 Bankruptcy?

 Posted on January 05, 2025 in Chapter 7 Bankruptcy

Even if you have decided to file bankruptcy because you know it is the best option for you and a way to get a fresh financial start, you may still understandably be concerned about losing your property. You might have heard that part of the Chapter 7 bankruptcy process involves selling your assets to pay off your debt, and while that is accurate to an extent, it is not the full story.

Whether it is your home – perhaps your most important asset – or a favorite piece of jewelry, some assets become part of the bankruptcy estate while others are exempt, meaning you can keep them. Find out which assets you may keep in Chapter 7 bankruptcy by having a conversation with an experienced Houston, TX attorney.

How Do Chapter 7 Bankruptcy Exemptions Work?

In Chapter 7 bankruptcy, your non-exempt assets are sold to pay off creditors. The key word here is "non-exempt." Bankruptcy allows you to keep assets that are exempt. Texas has a particularly favorable list of exempt assets and even allows you to choose between federal and state exemptions. You can make that decision by considering the assets you own and the assets you wish to keep, and of course by getting advice from a qualified attorney as to whether it is better for you to choose the Texas or federal exemptions.

What Are Common Texas Chapter 7 Bankruptcy Exemptions?

Homestead Exemption

Texas has one of the best homestead exemptions in the country. You can exempt an unlimited amount of equity in your home, so long as it is your primary residence, for properties as large as 10 acres in a city or town and 100 acres in a rural area. Texas also considers certain improvements to your home to be part of the homestead, so if you have added a pool, roads, a barn, or other similar improvements that are attached to the land, you can keep those as part of the homestead exemption as well.

Motor Vehicle Exemption

You can exempt the entire value of one car per licensed family member from Chapter 7 bankruptcy. However, this exemption blends in with the personal property exemption. The amount you exempt for the vehicle is counted as part of the personal property exemption.

Personal Property Exemption

Texas allows you to exempt up to $50,000 per person in personal property in certain categories, including clothing, food, home furnishings, jewelry, family heirlooms, pets, certain livestock, and more.

Retirement Plan Exemptions

Certain tax-deferred plans are exempt from Chapter 7 bankruptcy. In addition, individuals working in certain professions such as teachers, state employees, judges, firefighters, and police officers can generally exempt their retirement accounts.

Contact Our Brazoria, TX Chapter 7 Bankruptcy Attorney

Filing for bankruptcy can be a tough choice, yet it can also be the right choice. Having the right representation to guide you through the Chapter 7 bankruptcy process can make a difference and the experienced Houston, TX bankruptcy lawyer at The Fealy Law Firm, PC is here to help you take care of your finances. When it comes to ensuring that you retain as many of your assets as possible, attorney Vicky Fealy has the skills to help you do that. Contact our law firm for a complimentary consultation by calling 713-526-5220.