Exemptions allow you to retain certain assets after bankruptcy. Texas is one the states in the U.S. that offers a choice of exemptions when filing for bankruptcy. Texas bankruptcy exemptions may be used or you can opt to utilize Federal Bankruptcy Exemptions instead. The two sets of exemptions cannot be mixed however; you must choose either state or federal exemptions.
Keeping property in a Texas bankruptcy relies heavily on exemptions and so it is imperative that you understand the differences between the two when determining the best way to protect your assets. In most cases, Texas bankruptcy exemptions are quite generous and usually allow you to retain your home and a large amount of personal property. There may be a situation, however, where you have assets that aren’t included in the list of Texas Bankruptcy exemptions. In this case, you could be better off using the federal bankruptcy exemptions which includes a sizable “wildcard” exemption that can be applied to any type of property. These are some additional instances when Texas Bankruptcy exemptions may be better than federal ones if you have:
- Significant Equity in Your Home
- A Large Amount of Personal Property
- A Valuable Jewelry Collection
- A Car Loan that is Paid Off
- Tools Needed for your Trade/Profession
Alternatively, the main reason you would want to use Federal bankruptcy exemptions when filing bankruptcy in Texas would be to keep items that are not covered under Texas exemptions. Again, the federal “wildcard” exemptions, which allows you to cover up to $1,250 worth of any type of property, as well as, any portion of the $11,850 Federal homestead exemption that you do not use for your home. It’s crucial that consult a professorial bankruptcy lawyer in Texas before filing bankruptcy in order to find out which set of exemptions you should use. A Houston bankruptcy attorney will help structure your bankruptcy in order to allow you to get out debt while keeping the majority of your personal property.