Sections of Texas Bankruptcy Code
Property 41.001, 42.001, 42.002
Under the Texas bankruptcy law, a debtor filing for Chapter 7 or Chapter 13 bankruptcy enjoys several generous personal property exemptions.
A single adult (not part of a family) is allowed to up to $30,000 in personal property exemptions.
A family is entitled to a maximum of $60,000 in personal property exemptions.
Those exemptions include personal property such as:
- Jewelry and unpaid commissions, both limited to 25% of the caps mentioned above during a bankruptcy.
- Home furnishings, including family heirlooms. It is important to understand, that items such as portable phones or a video recorder could not be found exempt under this section of the bankruptcy law because it is not considered "home furnishing." Under the bankruptcy law, an example of "home furnishing" would be a sofa, dining room table, armoire etc.
- Food is also classified as exempt personal property under the Texas bankruptcy law.
- Farming and ranching vehicles and implements enjoy a bankruptcy exemption.
- Tools of the trade are exempt under Texas bankruptcy law. Tools of the trade are defined as anything you must use to conduct your profession. For example, if you're a carpenter and owned an expensive set of power drills, that may classify under this exemption.
- Wearing apparel, anything you put on your body (except jewelry) is exempt under the Texas bankruptcy law. This could include but is not limited to clothes, belts or coats.
- Debtors filing for bankruptcy can also exempt up to two firearms under the Texas bankruptcy law.
- Bicycles, treadmills, tennis ratchets, basketballs and all other athletic/sporting equipment can be claimed as exempt under the Texas bankruptcy law. It's important to note that only small equipment designed for individual use can qualify under this exemption. Therefore, although a sailboat may be considered sporting equipment, it is large and designed for more than one person and therefore does not qualify for this exemption.
- A motor vehicle with 2, 3 or 4 wheels is exempt under Texas bankruptcy law. This statute will allow one motor vehicle exemption per family member. Note that even if a family member does not have a driver's license you may be able to get a vehicle to qualify under this exemption if the family member depends on someone else (a licensed driver) to transport them in that vehicle.
- Farm animals are exempt under the Texas bankruptcy law, including two horses, mules or donkeys, plus a saddle, blanket and bridle for each of them. Heads of cattle (limited to 12), heads of other livestock (limited to 60) and 120 fowl can be claimed as exemptions.
- Household pets can be claimed as exempt property. If you want to exempt an exotic pet, check with you Dallas-Fort Worth attorney to see if it qualifies.
- Certain life insurance policies can be claimed under the personal exemption when filing for bankruptcy.
- Wages you receive for personal service are completely exempt under the bankruptcy law, except when they are being seized for a court-ordered child support payment. Self-employed debtors filing for bankruptcy are not protected under this exemption. Their wages will be treated as unpaid commissions for personal services which are included in the property subject to the exemption cap and cannot exceed 25% of the cap.
- Health aids professionally prescribed for the debtor, the debtor's spouse or dependents are completely exempt with no cap on their value. This might include hearing aids, eye glasses, wheelchairs or therapeutic equipment.