One of the most frightening aspects of filing for bankruptcy is the prospect of losing all your property. However, losing everything through bankruptcy is nothing more than a misconception. Each state has their own laws regarding this. For example, Texas law has a series of protections built in to assure that you do not lose your indispensable possessions. If you are considering taking this process, it is important to make sure that you know what is and is not exempt from the procedure so that you are not caught off guard when you do decide to file for bankruptcy. Not all state laws cover the same amount or types of property. In order to understand exemptions, it is important to understand bankruptcy laws and its exemptions.
In the state of Texas, the property exemption laws are known as "Asset Protection." These laws are found under Texas Property Code 41. This is a combination of laws that guarantee your preserved ownership no matter what you owe. The purpose of such laws is to make sure that you can still survive and live securely even when you have a significant amount of debt. Like Florida, Texan laws concerning property exemption are quite generous. The first place to start is your home. A homestead is exempt according to Texas law as long as it does not exceed 10 acres. The actual value of the land or home does not matter as long as it falls within the appropriate size. Also, any sale proceeds received from selling the homestead is protected for six months.
After ascertaining if your home property is protected, you must see to the rest of your possessions. Personal property is protected under Property Code 42. In terms of automobiles, one vehicle is exempt for each licensed adult, as well as for a licensed minor who provides transportation for an adult. Any household domestic pet, as well as their food, is exempt. If you own farm animals then 2 horses, mules, or donkeys are exempt as well as 12 head of cattle and 60 head of other livestock. Two of your firearms and up to $1,450 of your jewelry are also exempt from collection. Most payments made to you by the federal government are also exempt in Texas law.
The laws are clear: bankruptcy is not a process that will leave you devoid of all personal property. Though exemption laws may vary based on the type of bankruptcy you file, you still will maintain a good portion of your property. Some of the specific types that you can file are found in the U.S. bankruptcy code. These include Chapter 7 Liquidations, Chapter 9 Adjustment of Debts, Chapter 11 Reorganization, and Chapter 13 Adjustment of Debts of an Individual with Regular Income. There are federal exemption laws for each of these codes. The purpose of this step is to help you get a handle on your debt situation, not to wipe out everything you own so that you can no longer go on living. This process does not have to be overly painful. It can instead be a serious relief of a debt burden. Understanding your exemption laws may be the first hurdle needed to overcome the uncertainties surrounding bankruptcy.
If you are considering filing for bankruptcy but are worried about losing the majority of your personal property, consider hiring a lawyer. At Malaise Law firm, a bankruptcy lawyer is ready to help you understand all of Texas's bankruptcy laws, including the laws of exemption. Bankruptcy is meant to help you get back on your feet, not confiscate your means of living. With the help of Malaise Law Firm, you can be sure that you will be treated fairly while you file for bankruptcy.
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