Debtors' Bankruptcy Exemptions Lawyer in Texas

At various times and places–not here and not recently–bankruptcy consisted of gathering the debtor’s property and dividing it on a proportionate basis among his creditors. Stripped of everything, the debtor would try to begin a new life from a starting point of having nothing at all. Over the years, especially in the United States, it came to be recognized that certain possessions, such as clothing, tools, and livestock, are essential to the debtor’s ability to resume meaningful participation in society and the economy. Property that cannot be taken from a debtor to satisfy creditors’ claims is regarded as exempt property, and today’s bankruptcy system has continued and refined the concept of exemptions.

Contact the San Antonio bankruptcy lawyers at Rosenbaum Law Offices (now Davis Law Firm) for dependable advice about your ability to maximize exemptions in a Chapter 7 or Chapter 13 case, or if you have questions about your right to exempt a particular asset.

Although bankruptcy is strictly a matter of federal law, Congress has given each state the ability to define its own exemption system or instead commit its citizens to the flexible but modest federal exemption scheme. Texas debtors may use either the Texas or federal exemptions provisions. The Texas exemptions happen to be the most generous in the nation for debtors. Some of our exempt property laws are so favorable that special residency requirements have been established to prevent people from moving here from other states to take advantage of them in bankruptcy.

For example, to use the full value of the Texas homestead exemption, which allows unlimited exemption of homestead equity, the debtor must have been domiciled in Texas for 40 months, with residency here for the greater part of the six months preceding the petition. Texas debtors with less than 40 months of domiciliary status can claim more than $136,800 of equity per spouse as their homestead exemption. That is still a high homestead exemption by general American standards.

Some other provisions of the Texas bankruptcy exemption scheme allow the debtor to exempt such real estate and personal property as:

  • The debtor’s equity in one motor vehicle per driver in the household, including persons who do not drive but who rely on the availability of a car
  • Up to $60,000 in fair market value in personal property for a family, $30,000 for a single individual
  • Most pensions and retirement benefits, including 401(k) accounts
  • Equity in up to 100 acres of rural real property
  • Alimony payments
  • Two firearms per household

This incomplete list of exemptions is in addition to the more common exemptions provided for household goods, furniture, clothing, tools, books, and other necessities.

The property you choose to exempt is listed and valued on the schedules at the time your bankruptcy petition is filed. Sometimes a Chapter 7 trustee or a creditor might object to a particular exemption, but we can represent you in court on the matter if it cannot be resolved.

For more information about your ability to use the Texas bankruptcy exemptions to your advantage, contact Rosenbaum Law Offices (now Davis Law Firm).