What Are The Bankruptcy Exemptions In Texas? - Herrin Law
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What Are The Bankruptcy Exemptions In Texas?

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What Are The Bankruptcy Exemptions In Texas?

Exemptions are simply a legal term used to determine if you can protect your property from the bankruptcy process.


When you file a bankruptcy, you are required to turnover any NON-EXEMPT property. The good news is that in Texas, most of your property will be exempt. In over 95% of the cases I file, my clients are able to exempt 100% of their property. 

Texas is known as an opt-in state, which means you can choose the federal exemptions or the state exemptions.

The state exemptions are better if you own a home and/or if you have a lot of equity in a vehicle. For example, in Texas you get an unlimited homestead exemption, which means if you have $500,000 equity in your home, you can protect it. Under the federal exemptions, the homestead exemption is capped to around $25,000.00. 

Exemptions cover your personal belongings, retirement accounts, insurance policies, furniture and electronics, guns, etc. 

I am providing a complete list of both federal and state exemptions below. If you want to double check and make sure your property is protected, my office will conduct an exemption analysis for you.  Just call 469-607-8552 or go to our website at www.herrinlaw.com

FEDERAL EXEMPTIONS:

Most people use 11 U.S.C. § 522(n) to cover iras or roth iras. For single debtors filing, it has a coverage limit of $1,362,800.

11 U.S.C. § 522(d)(10); 11 U.S.C. § 522(d)(12).  Most people use 11 U.S.C. § 522(d)(10); 11 U.S.C. § 522(d)(12) to cover retirement or pension accounts (incl. 401(k)s, 403(b)s, profit-sharing and money purchase plans, sep and simple iras, and defined benefit plans). For single debtors filing, it has no coverage limit.

11 U.S.C. § 522(d)(10)(D). Most people use 11 U.S.C. § 522(d)(10)(D) to cover family support (alimony & child support). For single debtors filing, it has no coverage limit.

11 U.S.C. § 522(d)(10)(A). Most people use 11 U.S.C. § 522(d)(10)(A) to cover social security, unemployment compensation, local public assistance benefit. For single debtors filing, it has no coverage limit.

11 U.S.C. § 522(d)(10)(B). Most people use 11 U.S.C. § 522(d)(10)(B) to cover veterans’ benefits, disability, illness, or unemployment benefit. For single debtors filing, it has no coverage limit.

11 U.S.C. 522(d)(11)(A). Most people use 11 U.S.C. 522(d)(11)(A) to cover crime victim’s compensation . For single debtors filing, it has no coverage limit.

11 U.S.C. 522(d)(11)(B). Most people use 11 U.S.C. 522(d)(11)(B) to cover wrongful death award for person you relied on for support. For single debtors filing, it has no coverage limit.

11 U.S.C. 522(d)(11)(D). Most people use 11 U.S.C. 522(d)(11)(D) to cover personal injury compensation, not incl. pain and suffering. For single debtors filing, it has a coverage limit of $25,150.

11 U.S.C. 522(d)(11)(E). Most people use 11 U.S.C. 522(d)(11)(E) to cover loss of future earnings compensation. For single debtors filing, it has no coverage limit.

11 U.S.C. § 522(d)(7). Most people use 11 U.S.C. § 522(d)(7) to cover unmatured life insurance policies. For single debtors filing, it has no coverage limit.

11 U.S.C. § 522(d)(11)(C). Most people use 11 U.S.C. § 522(d)(11)(C) to cover life insurance payments for a person you depended on, which you need for support are both fully exempt. For single debtors filing, it has no coverage limit.

11 U.S.C. § 522(d)(7), 11 U.S.C. § 522(d)(8). Most people use 11 U.S.C. § 522(d)(7), 11 U.S.C. § 522(d)(8) to cover whole life insurance policy’s surrender value. For single debtors filing, it has a coverage limit of $13,400.

11 U.S.C. § 522(d)(6). Most people use 11 U.S.C. § 522(d)(6) to cover tools of trade. For single debtors filing, it has a coverage limit of $2,525.

11 U.S.C. § 522(d)(5) .Most people use 11 U.S.C. § 522(d)(5) to cover wildcard. For single debtors filing, it has a coverage limit of $13,900.

TEXAS STATE EXEMPTIONS

Texas Homestead Exemption

Prop. 41.001 & Prop. 41.002 – Unlimited equity in a homestead, but cannot exceed ten acres in a city, town, or village, or 100 acres (200 acres for family) elsewhere. Sale proceeds are exempt for six months after the sale.

Prop. 41.005, 41.021 to 41.023 – If property acreage is larger than what is covered by the homestead exemption, filing of a homestead declaration might be necessary.

Texas Personal Property Exemptions

Prop. 41.001& 42.002 – All personal property of a single person up to $50,000. All personal property of a family up to $100,000. Some limitations exist so you’ll want to refer to the statutes.

Texas Motor Vehicle Exemption

Prop. 41.002(a)(9) – You can exempt one motor vehicle per licensed household member. If a household member doesn’t have a license, you can exempt a vehicle if the unlicensed person relies on someone else to operate it.

Pensions and Retirement Accounts

You can exempt most tax-exempt pensions and retirement accounts under both the Texas exemptions and the federal exemptions. Texas provides that the following pensions and retirement accounts are exempt under Texas law:

Gov’t. 811.006 – County and district employee retirement and pension benefits.

Prop. 42.0021 – ERISA-qualified government or church benefits, including Keoghs, IRAs and Roth IRAs.

Civ. 6243e.1 – Firefighter retirement and pension benefits.

Gov’t. 831.004 – Judges’ retirement and pension benefits.

Gov’t. 615.005 – Law enforcement officers, firefighters, emergency medical personnel survivors benefits.

Gov’t. 811.005 – Municipal employees, elected officials, and state employees’ pension and retirement benefits (also Tex. Civ. Stat. Ann. Art. 6243h (22).)

Civ. 6243a-j – Police officer pension and retirement benefits.

Prop. 42.0021 – Retirement benefits to the extent they are tax-deferred.

Gov’t. 821.005 – Teacher retirement and pension benefits.

Insurance Exemptions

Ins. 885.316 – Fraternal benefit society benefits (such as those provided by the Freemasons, the Knights of Columbus and the Elks).

Ins. 1108.051 – Life, health, accident, or annuity benefits, including any money, policy proceeds or cash value due to or paid to the beneficiary or insured.

Ins. 1551.011 – Texas employee uniform group insurance.

Ins. 1575.006 – Texas public school employees’ group insurance.

Ins. 1601.008 – Texas state college or university employee benefits. 

If you want to discuss your financial situation in more detail you can call 469-607-8552 and set up your free financial strategy session (30 minutes).  Also, if you decide to hire my law firm and mention this letter, you will receive a 10% discount on your fees.