Texas Bankruptcy Exemptions

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.

Texas Exemptions v. Federal Bankruptcy Exemptions

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?

Common Texas Bankruptcy Exemptions

Here are some of the more common exemptions in Texas. When reviewing them, you'll want to keep these things in mind:

• Joint filing. Unless otherwise noted, when spouses file together in Texas, each spouse can claim the full amount of the exemption (informally called "doubling") as long as each spouse has an ownership interest in the property.
• List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you're protecting your assets.
• Legal citations. You'll find each of the statutes in the Texas Code Annotated or the federal law.

Texas Homestead Exemption

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.

Texas Personal Property Exemptions

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.

Texas Motor Vehicle Exemption

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.

Other Texas Exemptions

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.

Insurance Exemptions

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.

Nonexempt Property—Property You Can't Protect With a Texas Exemption

Some people can keep all assets, but that isn't always true. Here's what will happen to nonexempt property:

• In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
• In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you'll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You'll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Texas Exemptions

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.