If you’re wondering, “What is protected in bankruptcy in Texas?” a Dallas bankruptcy lawyer can answer your questions and advise you on the right decision to make for your financial situation.
For many people, the reality of facing bankruptcy can cause feelings of stress, confusion, and desperation. While bankruptcy might not be the ideal solution for every person’s financial hardships, filing for bankruptcy can be beneficial in certain situations. Some of the benefits include protection for select types of property through exemptions. An exemption essentially makes certain types of property exempt from seizure by debt collectors.
Both the federal government and the state of Texas allow you to protect property to varying extents according to their respective bankruptcy exemptions. Some states do not allow you to choose between the federal or state exemption, but fortunately, the state of Texas does give you that choice. There are differing protections for property that depend on whether you choose the Texas exemptions or federal exemptions.
Many people who are considering filing for bankruptcy have concerns about losing their homes. Fortunately, the exemption options can ease some of these concerns.
One significant difference between federal and Texas bankruptcy exemptions is the homestead exemption. While both the federal government and the state of Texas provide certain protections for an individual’s or a couple’s homestead, they have different limits. According to both Texas and federal bankruptcy rules, you must occupy the home you own in order to qualify for the homestead exemption. This exemption cannot be used to protect rental or investment properties.
The federal homestead exemption allows for the protection of a limited amount of equity in your property. The limit can be doubled for qualified married couples. The homestead exemption in Texas, however, has no limit for the amount that can be exempt from seizure by a debt collector. To qualify for the homestead exemption in Texas, the property must be under 10 acres within a city, town, or village. If the home is located in the country, the property must be under 100 acres with certain exceptions.
Likewise, many facing bankruptcy are worried about losing their car. Retaining your motor vehicle after bankruptcy can give you peace of mind that you will continue to be able to get to and from work.
Fortunately, the federal government and the state of Texas also provide exemptions for motor vehicles. The Texas exemption for motor vehicles is more lenient than the federal exemption. Whereas the state of Texas allows you to exempt the total value of one motor vehicle per licensed driver within a family, the federal government allows for an exemption of a limited amount.
Additional exemptions can provide protection for your property if you are facing bankruptcy. Some of the other exemptions include:
It can be confusing to understand what property you own qualifies for protection through bankruptcy exemptions. Plus, deciding between federal bankruptcy exemptions or exemptions through the state of Texas can be difficult.
For these reasons, it is advisable to seek professional legal guidance from a bankruptcy lawyer who understands bankruptcy laws at the state and federal levels. A knowledgeable attorney can help you achieve an optimal outcome for your bankruptcy case.
A: Bankruptcy in Texas can provide protection for certain types of property through exemptions. When bankruptcy is settled, debt collectors will seize property and sell it in order to recover money to pay for debts owed by the debtor. An exemption makes certain property exempt from these seizures by debt collectors.
Property that might be protected through exemptions in Texas includes your homestead, motor vehicle, certain retirement accounts, and a limited amount of personal property. The property that might be protected in your bankruptcy case will depend on your unique circumstances.
A: The amount of money you can keep in a bankruptcy in Texas will vary depending on your specific financial circumstances. It is important to be forthcoming about all of the assets you own and the amount of debt you have during a bankruptcy case. If you are considering bankruptcy, it is recommended to consult with a bankruptcy attorney who can help you understand your options and set realistic expectations for the amount of money you might be able to keep in a bankruptcy.
A: The property that is exempt from a judgment in Texas may not be the same from one bankruptcy case to the next. However, some property that is exempt is a homestead of a certain size, one motor vehicle per licensed driver within a family facing bankruptcy, personal property up to a limited value, tax-exempt retirement and pension plans, and spousal maintenance payments you are receiving.
It is important to keep in mind that there are limits to bankruptcy exemptions in Texas and that not all property is exempt.
A: Assets that are protected from creditors in Texas might include your primary residence, depending on the size and location of the land, your motor vehicle, personal property items such as family heirlooms, firearms, a limited amount of jewelry, and wages you are currently receiving for professional services. A bankruptcy in Texas does not always mean you will have to move out of your primary residence or lose your vehicle.
Bankruptcy cases can be difficult, but the legal team at Steele Law Firm, PLLC, can ease the process and make your bankruptcy case as simple as possible. Contact Steele Law Firm, PLLC, today to request a consultation and explore your options for bankruptcy in Texas.
