Updated January 30, 2019
You don’t need to worry that you’ll lose all of your assets when filing for bankruptcy. The exemption laws in Texas allow you to protect the things you’ll need to maintain a household and job, including equity in a home and car, and a retirement account.
Learn more about filing a Texas bankruptcy.
Some states, including Texas, allow residents to choose between the state and federal bankruptcy exemptions. You can’t protect property using both lists, but if you select Texas’s state exemptions, you can use the federal nonbankruptcy exemptions, too.
To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?
Here are some of the more common exemptions in Texas. When reviewing them, you’ll want to keep these things in mind:
Prop. 41.001 & Prop. 41.002 - Unlimited equity in a homestead, but cannot exceed ten acres in a city, town, or village, or 100 acres (200 acres for family) elsewhere. Sale proceeds are exempt for six months after the sale.
Prop. 41.005, 41.021 to 41.023 - If property acreage is larger than what is covered by the homestead exemption, filing of a homestead declaration might be necessary.
Prop. 41.001& 42.002 – All personal property of a single person up to $50,000. All personal property of a family up to $100,000. Some limitations exist so you’ll want to refer to the statutes.
Prop. 41.002(a)(9) – You can exempt one motor vehicle per licensed household member. If a household member doesn’t have a license, you can exempt a vehicle if the unlicensed person relies on someone else to operate it.
Pensions and Retirement Accounts
You can exempt most tax-exempt pensions and retirement accounts under both the Texas exemptions and the federal exemptions. Texas provides that the following pensions and retirement accounts are exempt under Texas law:
Gov’t. 811.006 - County and district employee retirement and pension benefits.
Prop. 42.0021 - ERISA-qualified government or church benefits, including Keoghs, IRAs and Roth IRAs.
Civ. 6243e.1 - Firefighter retirement and pension benefits.
Gov’t. 831.004 - Judges' retirement and pension benefits.
Gov’t. 615.005 - Law enforcement officers, firefighters, emergency medical personnel survivors benefits.
Gov’t. 811.005 - Municipal employees, elected officials, and state employees' pension and retirement benefits (also Tex. Civ. Stat. Ann. Art. 6243h (22).)
Civ. 6243a-j - Police officer pension and retirement benefits.
Prop. 42.0021 - Retirement benefits to the extent they are tax-deferred.
Gov’t. 821.005 - Teacher retirement and pension benefits.
Ins. 885.316 - Fraternal benefit society benefits (such as those provided by the Freemasons, the Knights of Columbus and the Elks).
Ins. 1108.051 - Life, health, accident, or annuity benefits, including any money, policy proceeds or cash value due to or paid to the beneficiary or insured.
Ins. 1551.011 - Texas employee uniform group insurance.
Ins. 1575.006 - Texas public school employees' group insurance.
Ins. 1601.008 - Texas state college or university employee benefits.
Add any applicable federal nonbankruptcy exemptions.
Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:
You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?
This list includes the majority of bankruptcy exemptions available in Texas, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Texas Code Annotated or with a local bankruptcy lawyer.