What Assets Are Exempt in Bankruptcy?
In a Chapter 13 bankruptcy, you repay some or all of your debts over time. Therefore, you do not forfeit any assets. In a Chapter 7 bankruptcy, some assets are exempt. Any non-exempt property must be surrendered to the bankruptcy trustee to be liquidated and distributed to your creditors. In Texas, you can choose from a federal list of exemptions or the state exemptions when filing Chapter 7. For most filers, the federal exemptions are more generous. But if your house is paid off, Texas exempts unlimited home equity. I will closely examine all your assets to determine which exemptions give you the best advantage in bankruptcy. In general, you will be able to keep: • Your house* and home equity • One car each* if you are married • All qualified retirement savings (401k, pension, IRA, insurance policies and annuities) • Your household furnishings and clothing • Jewelry up to a certain limit • Tools of trade • Wages * To keep your home and vehicles, you must continue payments and pay any
