If you are a Texas resident, and file Chapter 7 bankruptcy, usually most or all of your property can be claimed as "exempt" or safe from your creditors, which are represented by your Chapter 7 Trustee.

Texas was settled by folks with debt troubles. Many of them came from Tennessee or other states, just one step ahead of their creditors. Some wrote "GTT" for "Gone To Texas" in chalk on their cabin doors, so their creditors would know not to bother to pursue them. So our laws are written so that most or all of what most people own, can be claimed as exempt.

For example, your Texas homestead can consist of 10 acres of land plus all improvements, if in an urban area. In a rural area, you can exempt up to 100 acres of land plus all improvements, or 200 acres if a family. You can claim as exempt up to $30,000 of personal property if single, $60,000 if a family.

The property must be certain listed property in the law, but it consists of most everything that most people own, including furniture and household goods, clothes, vehicles (just the "equity" or value over any loans counts towards the exemption), even two guns.

Also, a Texans' retirement plans, IRA's, whole life insurance and annuities can be claimed as exempt. Frankly, you can exempt a lot of property in Texas. So much so that some people move to Texas to take advantage of our exemptions. This is limited somewhat now by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which provides among many other things, that to use a state's exemptions, you must live in that state for 2 years, and to exempt more than $136,000 in home equity, you must have owned the property for more than 1215 days (about 3 yrs and 4 months).

But to keep property, you must pay any valid liens on the property. If you have a mortgage on your house or a loan on your car, you must continue to pay those loans or the lienholder can eventually get permission to repossess or foreclose, after getting permission from the Bankruptcy Judge, or after the bankruptcy is over. You may also need to sign a "Reaffirmation Agreement" to keep such secured items.

If you are considering filing bankruptcy, hire a good lawyer. Hire a lawyer that is experienced in these cases. I have been practicing consumer bankruptcy law in Houston Texas since 1982. I am Board Certified in Consumer Bankruptcy Law by the Texas Board of Legal Specialization. To make an appointment, please call my office at 713-772-8037.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
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