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Texas Banktrupty Exemptions

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Title: Texas Banktrupty Exemptions


1
Texas Bankruptcy Exemptions
A Basic Guide
2
Bankruptcy Misconceptions
3
In 2012 there were 1.2 million bankruptcy
petitions filed across the United States.
4
People who could benefit from bankruptcy are
often hesitant to pursue that option because of
misconceptions.
5
For example, people often believe they will lose
their home, vehicle, or wages IF THEY FILE
BANKRUPTCY.
6
In reality, most people who file bankruptcy in
Texas dont lose any assets because of the
GENEROUS TEXAS AND FEDERAL BANKRUPTCY EXEMPTIONS.
7
Choosing a Chapter
8
Individuals can file chapter 7, 11, 12, or 13
bankruptcy cases.
9
Chapter 11 is usually used by small Businesses,
but can be used by individuals with large or
complicated financial matters.
a
10
Chapter 12 is filed by family farmers and
fishermen to reorganize their businesses.
b
11
Chapter 13 is filed by individuals who elect to
have their wages garnished for 3 to 5 years to
repay their creditors.
c
12
Most individuals can and should to file choose a
chapter 7 bankruptcy case.
13
Chapter 7 The Quickest Way to A Fresh Start
14
For almost all individuals filing bankruptcy in
Texas, the bankruptcy and federal exemptions
protect most, if not all, of their assets while
allowing them to be discharged from virtually all
of their debts.
15
Who Has Jurisdiction Over Bankruptcy Cases?
16
Bankruptcy is federal law, meaning that the
federal courts have jurisdiction over bankruptcy
proceedings in the U.S.
17
Although bankruptcy is federal law, each state
determines the exemptions debtors may use when
filing bankruptcy.
18
Determining Exemptions
A debtor can use the states exemptions if he or
she lived in that state for the two years before
the bankruptcy case is filed.
19
If you lived in Texas for the two years prior to
the filing of your bankruptcy case, you can use
either the state or federal exemptions both
allow most debtors to keep virtually all of their
assets.
20
What is an Exemption?
Think of an exemption as a way to legally protect
an asset from seizure by the bankruptcy trustee
for the purpose of satisfying creditor claims.
21
An exempt asset is an asset you can keep when you
file a bankruptcy case.
22
Federal vs. State Exemptions
The U.S. Bankruptcy Code provides a list of
federal exemptions. Individual states are also
allowed to create their own list of exemptions.
23
Furthermore, each state determines if a debtor
must use the states exemptions or has the option
to choose the federal exemptions instead.
24
Texas allows a debtor to use either the federal
or state exemptions BUT NOT BOTH
25
A married debtor filing a joint petition may
double many of the exemptions, EITHER FEDERAL OR
STATE.
26
Texas Exemptions
Texas has some of the most liberal exemptions of
all the states.
27
A few commonly used exemptions include
Homestead Texas has an unlimited homestead
exemption that allows a debtor to exempt a
residence and up to 10 acres if the debtor lives
in the city or a residence and up to 100 to 200
acres if the debtor lives in the country.
Vehicle full value of one motor vehicle per
licensed household member. If a household member
is unlicensed, you may still be able to exempt a
vehicle for that individual if he or she relies
on someone else to operate the vehicle for the
individual. Additional vehicles allowed if used
in trade or business.
Livestock pets, two horses/mules/donkeys plus
tack, 12 head of cattle, 60 head of other
livestock, 120 fowl.
28
Personal Property up to 60,000 if you have a
family 30,000 if you are single without a family
Retirement/Pensions federal law exempts most
tax-exempt pension and retirement accounts even
if you elect to use the Texas exemptions. Texas
law also exempts other accounts
Insurance Benefits all life, health and
accident benefits are exempt
29
Federal Exemptions
30
Homestead up to 22,975 in equity in your
home (doubled if married plus wildcard)
1
2
Vehicle up to 3,675 in equity in one motor
vehicle
Personal Property household good up to an
aggregate value of 12,250 but no more than 575
for any one item
3
4
Retirement Accounts all tax-exempt retirement
accounts up to a cap of 1,245,475 on IRAs and
Roth IRAs
5
Wildcard -- 1,225 plus up to 11,500 of the
unused portion of your homestead exemption for
any other property
31
Exemptions and Secured Debt
An exemption will protect your property from
being sold to repay creditors but you still have
to pay the purchase money lender who financed the
purchase of your car or home if you want to keep
that asset.
32
For instance
Your homes current market value is 200,000 and
you owe 100,000 on the loan.
33
For instance
Your homes current market value is 200,000 and
you owe 100,000 on the loan.
The Texas homestead exemption will protect the
100,000 of equity you have in the home.
34
For instance
Your homes current market value is 200,000 and
you owe 100,000 on the loan.
The Texas homestead exemption will protect the
100,000 of equity you have in the home.
However, if you want to keep your home, you must
still pay the purchase money lender. Claiming the
home as exempt does not remove the purchase money
lenders lien on your home.
35
Want to Know More About Bankruptcy Exemptions in
Texas?
36
Get Your Bankruptcy Exemptions Answered
Click to visit centraltexasbankruptcy.com
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