Texas Bankruptcy

Filing for bankruptcy can be a complicated process

, which is why most people rather go to an attorney. While its great to research the process of filing for bankruptcy on your own, its important to know that each state does vary a bit. The Texas Bankruptcy court is divided into four districts: North, South, East and West.

While the federal Bankruptcy Code does dictate most of the bankruptcy process, each state has their own small differences. Mostly, state laws can help you determine which bankruptcy is best for you and based on what is considered exempt. For instance, some types of debt are better managed with a Chapter 13 bankruptcy versus a Chapter 7 one.

So how does Texas differ? Luckily for Texans, Texas has one of the most generous exemption systems in the U.S. for keeping your personal property during bankruptcy. During a Chapter 7 bankruptcy or a liquidation bankruptcy, the debtor will need to liquidate their assets to pay off their creditors. There are, however, exemptions, items that are exempt from the liquidation process.

While the federal homestead exemption for keeping your home exempt from your bankruptcy allows for $20,020 of exemption, the Texas exemption allows an unlimited value to be exempt on your home. Your homes value can be exempt for up to 10 acres in city limits and 200 acres in rural areas for a family (100 acres for an individual).

Under federal law $10,775 of personal property is exempt and a family vehicle is protected up to $3,225. But Texas bankruptcy law allows for $30,000 worth of personal property to be exempt for an individual and $60,000 for a family and will allow one family vehicle to be exempt, no matter the value. The car does, however, count towards the personal property cap of $60,000 (or $30,000 for an individual).

These exemptions are only for Chapter 7 bankruptcy, and a Chapter 13 bankruptcy offers even more property protection. Chapter 13 bankruptcy may be a better fit for those with a steady income. Chapter 13 bankruptcy is a reorganization that puts a hold on your creditors while you can figure out your debt situation and pay back your creditors.

Before doing anything, its important to contact a Brownsville bankruptcy attorney, so you can fully understand your rights and exemptions. They can help you decide which bankruptcy is best for you, and can take the complication out of the process.

by: Davis Law

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