Bankruptcy / Texas / Exemptions

Texas Bankruptcy Exemptions 2021: Estimate Risk of Losing Home, Car, and Other Belongings

Written by Ben Tejes
Updated Nov 17th, 2021

Texas bankruptcy exemptions help you understand which items such as a house or car are at risk of losing if you file bankruptcy. Unfortunately, bankruptcy exemptions in Texas are complex.

The purpose of this article is to present the Texas bankruptcy exemptions in an understandable format. There is a list of exemptions for Texas, but it can be difficult to parse through. If you prefer to answer a simple set of questions, feel free to use the Texas bankruptcy exemptions calculator below to estimate which belongings are at risk.


How do Texas bankruptcy exemptions work? 

Bankruptcy exemptions can help you keep specific belonging when filing Chapter 7 bankruptcy. In many states, there are bankruptcy exemptions that cover your home, vehicle, jewelry, tools of your trade, etc. The bankruptcy exemptions can also help guide your Chapter 13 plan payment. 

Here’s a couple of things to note:

  1. In the world of bankruptcy exemptions, there are state and federal bankruptcy exemptions. Texas is a state that allows you to use federal bankruptcy exemptions
  2. You must have lived in Texas for a specific period of time before the bankruptcy filing to take advantage of the Texas bankruptcy exemptions. Check this guide to exemption options for nonresident debtors.
Just for your reference, bankruptcy exemptions are often on the state level. So, bankruptcy exemptions in Houston will be the same (or very similar) to exemptions in San Antonio.

Texas Bankruptcy Exemptions


Below are some of the most common bankruptcy exemptions for Texas. Let’s get into the numbers. Please note the below is the best estimate at the time of writing, but check the actual legal text for the most accurate exemption data.

Homestead Exemption

The homestead exemption is often broken down by age and whether you are married. 

  • Single and under 65: Infinite

  • Single is 65 or older: Infinite

  • Married and under 65: Infinite

  • Married is 65 or older: Infinite

Texas specific homestead bankruptcy exemption text: “Tex. Const. Art. XVI, §§ 50, 51; Tex. Prop. Code §§ 41.001 to 002. Unlimited for 100 acres rural (single) / 200 acres rural (family), 1 acre urban. sale proceeds exempt for 6 months after sale (renting okay if another home not acquired, Prop. 41.003). Must file homestead declaration, or court will file it for you for a fee. Due to Enron executives keeping multi-million dollar mansions, those convicted of securities violations are capped at $125,000.” (Source)

Automobile Exemption

The automobile bankruptcy exemption in Texas is Infinite.

Jewelry Exemption

The jewelry bankruptcy exemption in Texas is $12,500.

Personal Property Exemption

The personal property bankruptcy exemption in Texas is $50,000.

Special Exemption Handling for Texas

Below is specific special handling of bankruptcy exemptions in Texas.

  • Jewelry: up to $25,000 for a family
  • Personal: up to $100,000 if you have a family

Other Common Bankruptcy Exemptions

Here are other common exemptions. There may be limits to the amount of the bankruptcy exemption, so please be sure to check each one individually.

  • 401(k) Plan
  • 403(b) Plan
  • IRA
  • Alimony
  • Annuities
  • Disability Income and Benefits
  • Health Savings Account
  • Social Security Benefits
  • Unemployment Compensation and Benefits
  • Worker’s compensation

Not covered here include less common exemptions such as illness benefits, firefighter pensions, retirements involving stock. However, we encourage you to research the official Texas legal text for more information.

Alternatives When You’re At Risk From Texas Exemptions

You may have too much equity in a belonging, which makes you consider other options. For example, let’s say you own a boat outright that is valued at $100,000. With the wildcard exemption in Texas, you may be at risk of losing that vehicle. 

There’s an opportunity to still do the Chapter 7 bankruptcy, but the trustee may liquidate the boat to pay off some of the creditors. You have a couple more prominent options:

Chapter 13 Bankruptcy

The Chapter 13 Bankruptcy in Texas is called wage earner's bankruptcy where you pay a monthly payment plan. You would be set up on a 3 or 5-year plan that would be a set monthly rate based on what you can afford. This option is generally more expensive than a Chapter 7 after legal fees, but it is a valid option for many folks who are above the exemptions

Debt Settlement:

Debt Settlement is where a company or you would negotiate a lower amount owed with the creditors directly because of the financial hardship that is preventing you from paying your bills. For example, a debt settlement company would try to negotiate a $10,000 credit bill down to $5,000. This option would still negatively affect your credit and there are fees associated with this option, but it is a valid option for many and can be quicker than a Chapter 13 bankruptcy depending on how aggressive you are with negotiating and paying off the debt.

Debt Management

Debt Management is where a company would negotiate a lower interest rate with your creditors because of financial hardship. For example, a debt management company would try to negotiate a credit card’s interest rate from 22% to 8%. This option is often the most expensive of the debt relief options and can work best for credit cards, but debt management is a valid option for many folks.

Conclusion:

Understand what items you may lose when filing bankruptcy to help you make a more informed decision. The bankruptcy exemptions in bankruptcy exemptions calculator or reach out to us directly at support@tryascend.com if you have any questions.