Bankruptcy Exemptions
Bankruptcy Attorney in Houston
There are both federal and state laws about certain assets that are exempt from the bankruptcy seizure and liquidation process. If you are filing for bankruptcy in Houston, you have at least some luck on your side. Texas has some of the most liberal bankruptcy exemption laws in the country, which means that if you choose to file for Chapter 7 or Chapter 13 bankruptcy, you will be able to keep a large portion of your goods and assets.
Property: Most people's number one concern about filing for bankruptcy is whether or not they will be able to keep their home and land. The good news is, up to 10 acres in a town or city are exempt from seizure and liquidation, up to 100 acres elsewhere are exempt if you are single, and up to 200 acres are exempt for your family. The downside is that if you file for Chapter 13, you may still have difficulty making your mortgage payments, and the exemptions are not for mortgage defaults. If you do sell your property, the money that you receive is exempt for 6 months.
Home Furnishings: This is one of the areas that Texas bankruptcy law has generous protections. Many of your home goods are exempt and cannot be used for collection, although there is a $30,000 value limit for individuals and a $60,000 value limit for families. Items that are protected are: furniture, family heirlooms, clothing, 2 firearms, sporting equipment, jewelry (no more than 25% of limit), and tools of the trade. Your life insurance cash value is part of the limit, and besides jewelry, the value of the assets can be divided however you wish. Religious texts are also exempt and have no limit.
Vehicles: Each adult with a license can have 1 motor vehicle, although if an adult relies on a minor for transportation, then 1 vehicle is allowed for that as well.
Farm and Ranch: If you have a farm or ranch, you can keep a certain amount of livestock: 12 cattle, 60 livestock animals, 120 fowl, 2 horses/mules/donkeys, as well as some upkeep materials, such as and a blanket and bridle for each horse/mules/donkey and food for all animals. You are also allowed to retain farm and ranch vehicles and some equipment.
Military: If you or your spouse is or was in the military service, there are many exemptions, such as military life insurance, military survivor's benefits, seaman's wages, seaman's clothing, veteran's benefits, and military deposits into a savings account while the individual is on permanent duty out of the country.
Pets: Don't worry; you will not have to sell your household pets! If you have an exotic pet, however, exemption is left to the judge's discretion.
Accounts / Benefits: Many accounts are exempt from bankruptcy proceedings; these include life insurance, higher education trusts, health savings accounts, social security, unemployment benefits, IRA accounts, prepaid tuition, retirement plans, government employees' pensions, public assistance, crime victim awards, child support, and alimony.
Miscellaneous: Other exempt items include food, health aids such as glasses and wheel chairs, business partnership property, burial plots, and wages that you have already earned but have not been paid for.
Contact a Houston Bankruptcy Lawyer at our firm if you believe that bankruptcy might be the best option for you and your family.