January 18, 2014 /24-7PressRelease/ -- What property can I keep if I file bankruptcy in Texas?---
Article provided by The Smeberg Law Firm, PLLC
Visit us at http://www.sanantonio-bankruptcy.com
For many people, an expense such an unexpected visit to the hospital can be the proverbial straw that breaks the camel's back, pushing them into financial insolvency. Many people in this situation consider filing Chapter 7 bankruptcy, but hesitate to do so because they have heard that they will lose all of their property during the process.
Although it is true that the debtor's assets are sold during the Chapter 7 process, only nonexempt property, or property not covered by a bankruptcy exemption, may be sold. Fortunately, under Texas law, most of the debtor's most cherished assets are exempt from the sale.
Exemptions in Texas
Which property is exempt is found under federal and Texas law. In Texas, debtors seeking bankruptcy have the option of choosing between the federal and Texas exemptions. However, as the Texas exemptions are among the most generous of any state in the nation, most choose to have the Texas exemptions apply.
Many people who file for bankruptcy fear losing their most important asset--their home--during Chapter 7. However, under the Texas homestead exemption law, bankruptcy filers can keep their primary residence (up to 100 acres in the country and 10 in the city) out of the bankruptcy estate. Unlike most other states, there is no limit on the value that is exempt in Texas.
Since the primary residence is exempt under Texas law, it cannot be sold to pay the debtor's debts during Chapter 7 bankruptcy. Additionally, if the debtor chooses to file Chapter 13 bankruptcy instead in order to avoid losing nonexempt assets, the homestead exemption can keep the monthly payment amount under the repayment plan affordable, as the value of the home is not factored in when the court calculates the amount.
Aside from the homestead exemption, Texas law also exempts many important items of personal property from the bankruptcy estate. However, unlike the homestead, the personal property exemption is limited to $30,000 for single filers and $60,000 for married filers or families. Under the exemption, filers may exempt the following items up to the limit (list is non-exhaustive):
-Furniture and furnishings
-Jewelry (up to $15,000)
-Burial plots and medical supplies
In addition, Texas law also allows filers to exempt up to one motor vehicle per licensed driver in the household.
Consult an attorney
The law surrounding bankruptcy exemptions is rather complicated and full of exceptions. As a result, it is important to seek the advice of an experienced bankruptcy attorney before filing. An attorney can fully advise you on how bankruptcy would affect you individually and work to ensure that your most important property is kept out of the hands of your creditors.
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