Texas Bankruptcy Exemptions

Table of Contents

• How Do Bankruptcy Exemptions Work?
• How Do I Use Texas Exemptions to Protect Property?
• Will Texas Bankruptcy Exemptions Protect My Property?
• What Are Commonly Used Bankruptcy Exemptions in Texas?
• How Do I Find Texas's Bankruptcy Exemptions?
• How Do Federal Bankruptcy Exemptions Compare to Texas's Exemptions?
• What Happens to Property I Can't Exempt in a Texas Bankruptcy?
• What Are the Differences Between Chapters 7 and 13 Bankruptcy?
• How Long Does it Take to File for Bankruptcy in Texas?
• How Long Do I Have to Live in Texas Before I Can Use Its Bankruptcy Exemptions?
• How Can I Avoid Bankruptcy Exemption Problems in Texas?
• What Will Happen If I Make an Exemption Mistake in Texas?
• Should I Hire a Lawyer to Help With Bankruptcy Exemptions in Texas?
• How Much Does It Cost to File for Bankruptcy in Texas?
• Can I Make Payments to My Bankruptcy Lawyer?
• Need More Bankruptcy Info?

Texas bankruptcy exemptions protect your property in bankruptcy, and becoming familiar with bankruptcy exemptions before filing will help you determine whether your assets will be at risk.

If you have more questions, read How Bankruptcy Works in Texas. You'll find answers, helpful checklists, and an interactive bankruptcy quiz link.

The Texas homestead exemption is as generous as a homestead exemption comes. You can protect an unlimited amount of equity in your principal residence. Learn more about qualifying for the homestead exemption and protecting your home in bankruptcy.

Texas Motor Vehicle Exemption

The Texas motor vehicle exemption is also generous—the law allows you to exempt the entire value of one motor vehicle per licensed household member. If you have a household member who doesn't have a license, you can still exempt that vehicle if the unlicensed person relies on someone else to operate the vehicle. However, you must include the motor vehicles in the $50,000/$100,000 personal property exemption cap--more below. (Tex. Prop. Code § 41.002(a)(9).)

Find out how the motor vehicle exemption works in a Chapter 7 case and protecting cars in bankruptcy.

Texas Personal Property Exemptions

The personal property you exempt (things other than real estate) cannot exceed a total of $50,000 if you are a single adult or $100,000 if you have a family. For example, if all your personal property is worth $125,000, you can exempt only $100,000 of it if you are the head of a family. The remaining $25,000 will be nonexempt. By contrast, a single person would be limited to a total of $50,000 of personal property.

You'll include these items in the $50,000/100,000 cap:

• Home furnishings, including family heirlooms. (Tex. Prop. Code § 42.002 (a)(1).)
• Clothing and food. (Tex. Prop. Code § 42.002 (a)(2),(5).)
• Farming and ranching vehicles and implements. (Tex. Prop. Code § 42.002 (a)(3).)
• Tools of the trade, books, equipment, commercial boat, or vehicles. (Tex. Prop. Code § 42.002 (a)(4).)
• Jewelry is limited to $12,500 for a single filer and $25,000 for a family. (Tex. Prop. Code § 42.002 (a)(6).)
• Two firearms. (Tex. Prop. Code § 42.002 (a)(7).)
• Athletic and sporting equipment, including bicycles. (Tex. Prop. Code § 42.002 (a)(8).)
• Animals, including pets and domestic animals plus their food; two horses, mules, or donkeys, plus tack; 12 head of cattle; 60 head of other livestock; and 120 fowl. (Tex. Prop. Code § 42.002 (a)(10),(11).)

These items are also exempt, but you don't need to count them as part of the $50,000/100,000 cap:

• Current wages except for court-ordered support. (Tex. Prop. Code § 42.001 (b)(1).)
• Health aids such as wheelchairs, canes, and hearing aids. (Tex. Prop. Code § 42.001 (b)(2).)
• Alimony, support, and maintenance. (Tex. Prop. Code § 42.001 (b)(3).)
• Bibles or other books containing sacred religious writings. (Tex. Prop. Code § 42.001 (b)(4).)
• Burial plots (Tex. Prop. Code § 41.001 (a).)

Pensions and Retirement Accounts

Most tax-exempt pensions and retirement accounts are exempt, even if you choose the Texas exemptions instead of the federal exemptions because federal law lets filers keep tax-exempt retirement accounts in bankruptcy. These retirement accounts include 401(K)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and traditional and Roth IRAs to $1,512,350 per person. (11 USC 522(b)(3)(C); (n); amounts valid for bankruptcy cases filed between April 1, 2022, and March 31, 2025.)

You can check with your fund to find out if it qualifies for tax-exempt status. Additionally, Texas provides that the following pensions and retirement accounts are exempt under Texas law:

• Qualified retirement plans. (Tex. Prop. Code § 42.0021.)
• State employees; teachers; judges; county and district employees; municipal employees. (Tex. Govt. Code §§ 811.004 - 811.006.)
• Firefighters; policemen. (Tex. Civ. Stat. Ann. Art. 6243a-1, g, j.)

Insurance Exemptions

• Fraternal benefit society benefits (such as those provided by the Freemasons, the Knights of Columbus, and the Elks). (Tex. Ins. Code § 885.316.)
• Life, health, accident, or annuity benefits, including any money, policy proceeds, or cash value due to or paid to the beneficiary or insured. Tex. Ins. Code § 1108.051.
• Texas state employee group life insurance. (Tex. Ins. Code § 1551.011.)

Other Exemptions

• College savings plans. (Tex. Prop. Code § 42.0022.)

• Crime victim's award. (Tex. Crim. Pro. Code 56.49.)
• Public officers killed in duty survivors benefits. (Tex. Govt. Code § 615.005.)
• AFDC, welfare, foster care benefits. (Tex. Hum. Res Code § 31.040.)
• Medical assistance. (Tex. Hum. Res Code § 32.036.)
• Interest in specific partnership property. (Tex Rev. Civ. Stat. Art. 6132a § 7.03(d).)
• Unemployment benefits and workers' compensation. (Tex. Labor Code §§ 207.075, 408.201.)