Bankruptcy Exemptions

• If you file a Chapter 7 bankruptcy in Texas, you are allowed to keep certain assets so you can have a "fresh start" after bankruptcy. Any amounts you own in excess of these state-defined levels, known as exemption levels, must be surrendered to the state to help pay your creditors. Exemptions do not apply to Chapter 13 bankruptcies as you are allowed to keep all of your assets.
  
  

Texas Bankruptcy Exemptions

• Texas has some of the most generous bankruptcy exemptions in America, especially its homestead exemption. If you file Chapter 7 bankruptcy as a resident of Texas, you can keep your personal residence regardless of its value. You may also keep personal property up to $30,000 in value, or $60,000 if you are categorized as the head of a family. Other categories of exemptions include insurance, pensions, public benefits, tools of the trade and wages.
  
  

Disposition of Non-Exempt Assets

• Assets above exemption levels as defined by Texas are deemed non-exempt and are subject to liquidation by the bankruptcy trustee. You may be able to keep your non-exempt assets if the trustee determines the time and expense of possessing and liquidating your assets does not justify the reward. In other cases you may be permitted to keep your assets by paying the trustee the non-exempt amount of the assets for distribution to your creditors.
  
  

Chapter 13 Bankruptcy

• In a Chapter 13 bankruptcy in Texas, all of your assets are exempt. In return for this protection, the bankruptcy court requires that you make payments for either three or five years to your creditors. If you have particularly valuable assets that you cannot protect using the Texas Chapter 7 bankruptcy exemptions, Chapter 13 may be a more attractive alternative.