The Texas Homestead Exemption

Most people want to know whether they can keep valuable property before filing for bankruptcy—especially a home. If you qualify to use the Texas homestead exemption, you can protect some or all of the equity in your house. In this article, we explain:

• how much the Texas homestead exemption will cover, and
• how to apply it in your bankruptcy case.

For more bankruptcy information, read How Bankruptcy Works in Texas. Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz. Or, try the start-to-finish bankruptcy guide, What You Need to Know to File for Bankruptcy.

Homestead Exemptions Available in a Texas Bankruptcy

Texas lets filers use either the federal exemption system or Texas's state exemption system, so you'll have two homestead amounts to choose between. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.

To help you make an informed choice, we've listed both exemption amounts below. We've also included links to more complete federal and state exemption lists so you'll have an easier time deciding which set will work best for you.

If you're married, keep in mind that spouses can double some exemption amounts, but not all. Find out about other filing considerations for spouses.

Property Protected by Texas's Homestead Exemption

The Texas homestead exemption applies to real property serving as your primary residence, such as your home or condominium. Texas considers any improvements such as a swimming pool, barn, water tower, pumps, roads, and other items substantially affixed to your primary residence part of the homestead exemption. Texas also provides an unlimited homestead exemption for your burial plot.

Timing Your Texas Bankruptcy

You can file for bankruptcy in Texas after living there for more than 180 days. However, you must live in Texas much longer before using Texas exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.

But suppose you lived in multiple states during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.

Also, to claim the total value of the Texas homestead exemption, you must have purchased and owned the property for at least 1,215 days before the bankruptcy filing. If you can't meet this requirement, your homestead exemption is limited by federal law to $170,350 (this figure will adjust on April 1, 2022).

Learn more about this requirement, the current amount of the federal cap, and other important exceptions to homestead exemptions.

Claiming the Texas Bankruptcy Homestead Exemption

When filing for bankruptcy, you'll list your homestead exemption on Schedule C: The Property You Claim as Exempt when completing your bankruptcy forms. Keep in mind that you'll need to meet other requirements to prevent losing your home in bankruptcy. Find out more in Your Home in Chapter 7 or Your Home in Chapter 13.

Texas has other "homestead exemptions" that allow you to get up to a $25,000 tax break on the property taxes of your principal residence. This isn't something you'll need to apply for before filing for bankruptcy. If you'd like to save on property taxes, you can learn more by visiting the Texas Comptroller webpage.

Finding the Texas Bankruptcy Homestead Exemption Statute

You'll find Texas's homestead exemption in the Texas Property Code at § § 41.001 – 41.024. on the Texas Constitution and Statutes website. Learn about finding state statutes in Laws and Legal Research.

Need More Help?

You might not know this, but Nolo has been making the law easy for DIYers for over fifty years. If you have questions, use the links we've included throughout for more details. Otherwise, you'll find the answers to almost all of your bankruptcy questions at nolo.com/legal-encyclopedia/bankruptcy or by consulting with a local bankruptcy lawyer.

This overview cannot provide all of the information you'll need to file a bankruptcy case. For more detailed information, consider buying a self-help book such as How to File Chapter 7 Bankruptcy by Attorney Cara O'Neill and Albin Renauer J.D.

Updated July 14, 2021