Exempt Property In Texas

Exempt Property in Texas

People who consider filing for bankruptcy quickly learn about the concept of property exemptions.  Simply put, exemptions refer to what can be excluded or what is “hands off” from creditors during a Chapter 7 or 13 bankruptcy petition.  Texas is much more generous than other states when it comes to property excluded during bankruptcy.

Exempt Property in Texas:  What can you keep?

If you are being sued for credit card debt and have likely turned to Google to learn more about your options.  While states vary in their exempt property allowances, nearly every state provides some protections that allow consumers a leg to stand on after bankruptcy.  As Texas residents, you are fortunate to be in a state offering the highest allowances.  Let’s dig into what these look like, and more importantly, why you should pursue a bankruptcy alternative as a result.



Texas Real Property Exemptions

Your real property homestead, situated on not more than one full acre of property in urban areas is exempt; if living in rural areas, up to 200 acres is exempt. The value of your house located on the urban and rural real property homesteads is not material.  It can be any amount and it will be exempt. These numbers are for a married couple.  For unmarried persons, this number is 100 acres for rural areas. If you are married or unmarried, the urban exemption is the same. This property is typically classified as homestead status, although there are some exceptions that we can discuss when I know more about your personal situation.

Personal Property Exemptions

This is a pleasant surprise to some, but exempt property in Texas includes up to $60,000 in personal property.  There are some nuances to consider, such as only 25% of the $60,000 exemption can be jewelry.  Still, this is not a bad percentage.  It gets even more surprising.

You can also retain a car for each licensed driver in your household.  This means that collection of judgments in Texas is very restrictive as there is no wage garnishment.  In many cases, consumers from other states will be shocked when comparing Texas laws to their own.  Additionally, livestock, tools of trade, and more are also considered exempt property in Texas.

Additional Property Exemptions:  Investments and Insurance

Even certain investments gain exempt coverage in our great state.  Some examples include insurance policies, annuities, retirement plans, pensions, social security payments, and other entitlements.  Creditors often find themselves in a very difficult position to collect on their judgments in Texas.  When consumers begin to realize that the law is in their favor, bankruptcy begins to fade as the only option available.  Bankruptcy may be held as conventional wisdom, but often the wisdom given by attorneys who profit from such advice.

As you can see, filing a Chapter 13 bankruptcy is often not prudent due to exempt property in Texas.  (Chapter 7 even less so.)  My philosophy is that people should pay the debts that they owe, however, we all know that bad things sometimes happen to otherwise good people.  These folks are my clients, and I’m glad to ethically guide them through the thicket of financial distress in leading them to a debt resolution plan, outside of filing for bankruptcy.  If this describes you, please give me a call today.  Don’t fear if you are being sued for credit card debt.  I’d be glad to listen to your situation and offer a no cost consultation by phone.


by Jed Shaw


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