Under Texas bankruptcy laws, those facing overwhelming debt may be able to find a way out. Before you file, learn what protections the current state laws offer.

Bankruptcy Exemptions

Texas bankruptcy laws give you two exemption schemes to choose from. Under the federal scheme, you may keep:

• Up to $20,200 for a home
• Up to $10,775 for life insurance policy with a loan value
• Alimony and child support
• Life insurance payments if you depended on the deceased
• ERISA qualified benefits, retirement benefits and pensions
• Up to $500 per item for a total of $10,775 for household goods
• Up to $3,225 for a vehicle
• Up to $1,350 for jewelry
• Health aids
• Unmatured life insurance contract
• Lost earnings payments
• A wild card exemption for $1,075 of any property and $10,125 of the unused homestead exemption
• Up to $20,200 for tools of the trade
• Up to $20,200 for personal injury payments
• Wrongful death, crime victim’s compensation, public assistance Social Security, unemployment, and veterans’ benefits payments

These amounts double for a married couple.

If you choose the state bankruptcy scheme, you can keep the following:

• Your home, which must be no more than 10 acres in town or 100 acres out of town or 200 acres for families
• Up to $30,000 for personal property, increasing to $60,000 for head of family. This is limited to one vehicle, two horses, mules, or donkeys with tack, 12 head of cattle, 60 head of other livestock, 120 fowl, and pets. Jewelry cannot exceed 25 percent of the exemption amount
• Health aids
• Burial plot
• Implements and vehicles for farming or ranching
• Unemployment
• Disability benefits
• Veterans’ benefits
• Worker’s compensation
• Social Security
• Property in a business partnership
• Retirement plan
• Life insurance proceeds
• Alimony and child support

Regardless of the plan you choose, if you wish to keep your vehicle and still owe money on it, you must reaffirm your debt within 45 days of the 341 meetings.

Chapter 7 Bankruptcy Information

Under Chapter 7 bankruptcy, qualified debtors can erase most of their debts. To qualify, you must pass the means test, which means you must have an income at or below the median level in Texas.

Chapter 13 Bankruptcy Information

Under Chapter 13 bankruptcy, debtors enter into a court supervised repayment plan to attempt to repay their debts over three to five years. After that time, some debts may be discharged.