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How bankruptcy exemptions can protect your financial stability

On Behalf of | Aug 2, 2021 | Bankruptcy |

Every year, millions of Americans find themselves on hard financial times. They may be hit by the sudden loss of a job or the onset of a medical condition, or they may wind up caring for loved ones that they never planned to take under their wing. Regardless of the circumstances, many of these individuals struggle for years or even decades to try to claw their way out of debt. The tragic reality, though, is that these individuals oftentimes only end up falling deeper into debt while they struggle to cope with the stress of their situation.

Don’t let that be you. Debt relief options are available to relive you of your debt burdens and reclaim the life that you want. Personal bankruptcy is one of the best ways to secure a fresh financial start, but there are a lot of misconceptions about the process. One of the biggest is that bankruptcy will leave you with no financial resources with which to start your post-bankruptcy life.

Be aware of bankruptcy exemptions

The truth of the matter is that the bankruptcy process has a number of exemptions aimed at giving you a firm financial footing post-bankruptcy so that you can confidently move on with your life. It’s worth noting that in Texas you can choose between state and federal bankruptcy exemptions, so you’ll want to know both systems.

Here are just a few of the assets that you can keep if you utilize Texas’s exemption system, even if you successfully pursue bankruptcy:

  • An unlimited amount of equity in your home and property if it meets certain qualifications
  • The entire value of one vehicle for each licensed individual in your household
  • Up to $50,000 worth of personal property, or up to $100,000 if your married, which include things such as furnishings, clothing, farm vehicles, jewelry, up to two firearms, and animals including a certain number of livestock
  • Certain investments, retirement accounts, and pensions

As you can see, the state exemptions allow you to keep a significant amount of your assets, which can give you the firm financial footing that you need after discharging your debts through something like a Chapter 7 bankruptcy.

Know the requirements

It’s important to recognize that bankruptcy exemptions aren’t automatically given. First, you have to meet certain residency requirements, which generally means living in the state for at least 730 days. You also have to have lived in your residence for at least 1,215 days before claiming the state’s homestead exemption.

But even if you meet those residency requirements, you still have to be proactive in securing the exemptions that you want. This means being detailed in your bankruptcy petition, which requires knowledge of the law and the bankruptcy process. A seemingly minor mistake in this area can have enormous implications for your financial future, and if you try to manipulate bankruptcy exemptions then you could be accused of bankruptcy fraud.

Secure the help that you need to successfully navigate your bankruptcy

Personal bankruptcy carries a lot of negative connotations. But it really can provide you with debt relief and a fresh financial start. That’s why you should carefully consider whether speaking to an attorney who is experienced in this area of the law would be beneficial. Time and again, law firms like ours have helped families like yours successfully navigate the bankruptcy process, and we stand ready to continue to do so for our clients for a long time to come.