What Property Can I Keep with a Bankruptcy?

In a Chapter 7 case, you can keep all property which the law says is "exempt" from the claims of creditors. You can choose between your exemptions under your state law or federal law. In many cases, the federal exemptions are better.

Federal Exemptions

 

11 U.S.C. §522

Single Debtor

Married Couple

Exemption

(d)(1)

$22,975.00

$45,950.00

Homestead (Must be residence)

(d)(2)

$3,675.00

$7,350.00

Vehicles

(d)(3)

$12,250.00

$25,500.00

Household Goods, Books, Animals
no more than $575 per item

(d)(4)

$1,550.00

$3,100.00

Jewelry

(d)(5)

$1,225.00

$2,450.00

In any property, plus part of the unused exemption in your home, up to $10,300

(d)(6)

$2,300.00

$4,600.00

Tools of the trade (including work vehicle)

(d)(7)

100%

100%

Life insurance contract

(d)(8)

$12,250.00

$24,500.00

Loan value against life insurance (minus premiums)

(d)(9)

100%

100%

Health Aides

(d)(10)(A)

100%

100%

Social Security & Unemployment

(d)(10)(B)

100%

100%

Veterans Benefits

(d)(10)(C)

100%

100%

Disability

(d)(10(D)

100%

100%

Alimony, Child Support (to the extent reasonably necessary)

(d)(10)(E)

100%

100%

Government benefits & pension, IRA, 401k & retirement (to the extent reasonably necessary) unless insider setup.

(d)(11)(A)

100%

100%

Restitution for benefit as a victim

(d)(11)(B)

100%

100%

Payment for wrongful death of a dependent (to the extent reasonably necessary)

(d)(11)(C)

100%

100%

Life insurance from death of person to which the debtor was a dependent (to the extent reasonably necessary)

(d)(11)(D)

$22,975.00

$45,950.00

Personal injury cases (does not include pain & suffering or loss of income)

(d)(11)(E)

100%

100%

Payment of settlement due to loss of income, (to the extent reasonably necessary)

 

 

Texas Exemptions

 

Description of Property

State of Exemption
Statute

Limit

Homestead. 200 acres for family (100 acres single adult) of rural land OR ten acres of urban land (land may be in one or more parcels and improvements are included; no value limit)

Const.Art. 1 Secs. 50,51/Property Code Sec 41.001, 41.002

100%, subject to some limitations.

Proceeds of voluntary sale of homestead (protected for 180 days after sale).

Texas Property Code Sec. 41.001(a)

100%

Lots held for burying grounds.

Texas Property Code Sec. 41.001(a)

100%

Home furnishings, include family heirlooms.

Texas Property Code Secs. 42.001(a), 42.002(a)(1)

$30,000.00 per debtor for all of Sec. 42.002(a)

Provisions for consumption

Texas Property Code Secs. 42.001(a), 42.002(a)(2)

$30,000.00 per debtor for all of Sec. 42.002(a)

Farming or ranching vehicles and implements.

Texas Property Code Secs. 42.001(a), 42.002(a)(3)

$30,000.00 per debtor for all of Sec. 42.002(a)

Tools, equipment, books and apparatus used in trade or profession

Texas Property Code Secs. 42.001(a), 42.002(a)(4)

$30,000.00 per debtor for all of Sec. 42.002(a)

Wearing apparel

Texas Property Code Secs. 42.001(a), 42.002(a)(5)

$30,000.00 per debtor for all of Sec.42.002(a)

Jewelry ($7,500.00/$15,000.00 Limit in addition to group limit of $30,000.00/$60,000.00). Only the group limit will be calculated.

Texas Property Code Secs. 42.001(a), 42.002(a)(6)

$30,000.00 per debtor for all of Sec.42.002(a)

Two firearms

Texas Property Code Secs. 42.001(a), 42.002(a)(7)

$30,000.00 per debtor for all of Sec. 42.002(a)

Athletic and sporting equipment, including bicycles.

Texas Property Code Secs. 42.001(a), 42.002(a)(8)

$30,000.00 per debtor for all of Sec.42.002(a)

One motor vehicle (2,3 or 4 wheeled) for debtor with drivers license or driver.

Texas Property Code Secs. 42.001(a), 42.002(a)(9)

$30,000.00 per debtor for all of Sec.42.002(a)

2 horses, mules or donkeys plus a saddle, blanket and bridle for each, 12 head of cattle, 60 head of other types of livestock, 120 fowl, forage on hand for each animal.

Texas Property Code Secs. 42.001(a), 42.002(a)(10)

$30,000.00 per debtor for all of Sec. 42.002(a)

Household pets

Texas Property Code Secs. 42.001(a), 42.002(11)

$30,000.00 per debtor for all of Sec. 42.002(a)

Present value of life insurance policy payable to family member or dependent.

Texas Property Code Secs. 42.001(a), 42.0021(a)(12)

$30,000.00 per debtor for all of Sec. 42.002(a)

Unpaid commissions for personal services. (Subject to an additional limit of $7,500.00 per debtor)

Texas Property Code Sec. 42.001(d)

$30,000.00 per debtor for all of Sec. 42.002(a)

Professionally prescribed health aids.

Texas Property Code Sec. 42.001(b)(2)

100%

Current wages for personal services.

Texas Property Code Sec. 42.001(b)(1)

100%

Proceeds of property of I.R.C. qualified personal or corporate retirement plans.

Texas Property Code Sec. 42.0021

100%

Partner's interest in partnership property.

VACS Art. 6132b, sec. 25

100%

Employees group life insurance benefits & contributions

Texas Insurance Code Art. 3.50-2, Sec.10, Art. 3.50

100%

Benefits paid under life, health or accident insurance policies.

Texas Insurance Code Art. 21.00, Sec. 1

100%

Fraternal Benefits Society Benefits

Texas Insurance Code Art. 10.28

100%

Unemployment compensation benefits.

VACS Art.5221b-1(c)

100%

Workers compensation benefits

VACS Art. 8306, Sec.3

100%

Public Assistance benefits.

Texas Humble Residents Code Sec. 31-040

100%

Medical assistance payments to needy.

Texas Humble Residents Code Sec. 32-036

100%

State employees retirement and pension benefits.

VACS Title 110B, Sec. 21.005

100%

Judicial system retirement benefits.

VACS Title 110B, Sec. 41.004

100%

Law enforcement officers' survivors' benefits

Vacs Art. 6228f, Sec.8

100%

County & District employees pension and retirement benefits.

VACS Title 110B, Sec. 51.006

100%

Municipal employees retirement benefits.

VACS Title 110B, Sec. 61.006; Art. 6243g Sec. 20

100%

Police, fireman & fire alarm operators pension, relief & retirement benefits.

VACS Art. 6243a Sec. 12 to 20 and 6243a-6243-j

100%

Teachers pension & retirement benefits.

VACS Title 110B, Sec. 31.005

100%

Crime victims compensation.

VACS Art. 8309-1, Sec. 7(f)

100%

Public School employees insurance benefits and contributions

Texas Insurance Code Sec. 3.50-4(11)

100%

Foreign Service Retirement and disability benefits.

22 U.S.C. Sec. 1104

100%

Social Security Benefits (include retirement, death and disability benefits).

42 U.S.C. Sec. 407

100%

Injury or death compensation payments from war risk hazards

42 U.S.C. Sec. 1717

100%

Wages due masters, seamen and apprentices.

46 U.S.C. Sec. 601

100%

Civil service retirement benefits.

5 U.S.C. Secs. 719,2265

100%

Longshoreman and harbor workers medical, disability and death benefits.

33 U.S.C. Sec. 916

100%

Railroad employees retirement and disability annuities.

45 U.S.C. Sec. 228(l)

100%

Veteran's group life insurance benefits.

38 U.S.C. Sec. 770(g)

100%

Veteran's Administration benefits (includes pension, life insurance and disability benefits ).

38 U.S.C. Sec. 3101

100%

Federal homestead lands and debts contracted before insurance of the patent

43 U.S.C. Sec. 175

100%

In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth now. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.

You also only need to look at your equity in property. This means that you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you count your exemptions against the $10,000 which is your equity if you sell it.

While your exemptions allow you to keep property even in a Chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a Chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law.

In most cases you will have to pay the mortgages or liens as you would if you didn't file bankruptcy.