If you’re thinking about filing bankruptcy in Texas, your biggest concern is likely:

“Will I lose my home or my property?”

The good news? Texas has some of the most generous bankruptcy exemptions in the country — especially when it comes to protecting your home.

Understanding how Texas exemptions work can give you clarity and peace of mind before making any decisions.

What Are Bankruptcy Exemptions?

Bankruptcy exemptions are laws that allow you to keep certain property when you file Chapter 7 or Chapter 13 bankruptcy.

Exemptions determine:

• What a Chapter 7 trustee can or cannot sell
• Whether Chapter 7 is safe for you
• How much you must repay in Chapter 13
• Whether your home equity is protected

Proper exemption planning is critical before filing.

Texas Requires Use of State Exemptions

If you’ve lived in Texas for at least 730 days (2 years) before filing, you must use Texas state exemptions. You generally cannot choose the federal exemption system.

Fortunately, Texas exemptions are very strong — particularly for homeowners.

The Texas Homestead Exemption (Extremely Powerful)

Texas is famous for its unlimited homestead exemption — with acreage limits.

What This Means:

Texas protects 100% of your equity in your primary residence, regardless of value, as long as the property falls within these limits:

• Urban property: Up to 10 acres
• Rural property:
  • Up to 100 acres for a single person
  • Up to 200 acres for a family

If your home fits within these acreage limits, your equity is generally fully protected in bankruptcy.

Example:
If your home is worth $800,000 and you owe $300,000, your $500,000 in equity is protected (assuming acreage limits are met).

This makes Texas one of the most debtor-friendly states in the country.

Texas Personal Property Exemptions

Texas also provides generous protection for personal property.

Personal Property Cap:

• $50,000 for a single filer
• $100,000 for a family

This total cap covers a broad range of assets, including:

• Vehicles
• Furniture
• Clothing
• Appliances
• Tools
• Jewelry (subject to limits)
• Sports equipment
• Livestock
• Bank accounts

The cap applies to the total fair market value of non-homestead personal property.

Motor Vehicle Exemption

Texas allows you to exempt:

• One vehicle per licensed household member

There is no specific dollar cap per vehicle as long as the total value fits within the overall personal property cap.

This is extremely helpful for families with multiple drivers.

Retirement Accounts

Most retirement accounts are fully protected under federal law, including:

• 401(k)s
• IRAs (subject to federal caps)
• Pensions
• Profit-sharing plans

Retirement savings are generally safe in Texas bankruptcy cases.

Public Benefits Protection

Texas protects many types of public benefits, including:

• Social Security
• Disability income
• Unemployment benefits
• Workers’ compensation
• Child support

How Exemptions Work in Chapter 7

In Chapter 7:

• A trustee can only sell non-exempt property.
• Because Texas exemptions are so strong, most cases are “no-asset” cases.
• Many Texans keep their home, vehicles, and personal belongings.

Proper planning is still essential — especially if you own non-homestead real estate, business interests, or significant non-exempt assets.

How Exemptions Work in Chapter 13

In Chapter 13:

• You keep your property.
• You enter a 3–5 year repayment plan.
• The value of non-exempt property affects how much you must repay unsecured creditors.

Even in Texas, exemption strategy can significantly impact your repayment plan.

Important Rules to Know

1. Residency Requirement

To use Texas exemptions, you must have lived in Texas for at least 730 days before filing. If you recently moved, different rules may apply.

2. Exemptions Protect Equity

Exemptions protect equity — not total value.

Example:

• Vehicle worth: $25,000
• Loan balance: $20,000
• Equity: $5,000

Only the $5,000 counts toward your exemption cap.

3. Do Not Transfer Property Before Filing

Transferring assets before bankruptcy can lead to serious consequences, including denial of discharge.

Why Texas Is Unique

Texas is one of the most bankruptcy-friendly states because:

• Unlimited homestead protection (with acreage limits)
• High personal property caps
• Strong vehicle protections
• Robust retirement protections

However, every case is fact-specific. High-income earners, business owners, and people with non-homestead real estate need careful analysis before filing.

Is Bankruptcy the Right Option?

Bankruptcy can:

• Stop foreclosure
• Stop repossession
• Stop wage garnishment
• Eliminate credit card debt
• Eliminate medical debt
• Provide a financial reset

But the decision should always follow a detailed asset and exemption review.

Speak With an Experienced Bankruptcy Attorney

If you are overwhelmed by debt in Texas, don’t assume you’ll lose everything. Texas law may protect far more than you think.

Before filing, make sure you understand:

• How much home equity is protected
• How vehicles are treated
• Whether Chapter 7 or Chapter 13 is better
• How to avoid costly mistakes

Schedule a consultation to review your options and protect what matters most.