Another Bankruptcy Advantage: Asset Protection via Exemption in Texas
One major benefit of the Chapter 7 bankruptcy process is the ability to exempt assets from seizure and sale, which funds could then be used to pay the claims of your creditors.
January 29, 2011
People who find themselves facing credit card debt, creditor harassment, repossession and other financial troubles have many options to consider. Yet there is no more powerful tool than bankruptcy, which provides advantages such as the automatic stay and the potential to discharge debts and make a clean start.One major benefit of the Chapter 7 bankruptcy process is the ability to protect certain assets from seizure and sale, which could then be used to pay the claims of your creditors. Each state identifies the extent of exemptions it will allow under the U.S. Bankruptcy Code, and Texas residents are granted some of the broadest provisions of any state. The basic allowances include:
- The homestead exemption: a debtor who has been domiciled for 40 months can exempt all equity in a home; those with shorter residency can exempt $136,800 of equity -- married couples can double this
- The motor vehicle exemption: full equity in one motor vehicle per driver, including individuals who do not drive but who rely on a car being available
- Most retirement benefits, including 401(k) accounts and pensions
- Equity in rural real property not exceeding 100 acres
- $30,000 in personal property for a single individual (fair market value); up to $60,000 for a family
- Two firearms per household
- Spousal support (alimony) payments
In Texas, the bankruptcy petitioner can opt to use the federal bankruptcy exemptions, but most will find the state provisions to be more generous. While many people tend to think of Chapter 7 bankruptcy as a process that wipes the slate clean, the fact is that those who qualify are allowed to hold on to a substantial share of their most precious assets while leaving behind significant debts.
Protect Your Personal Property and Other Vital Assets
Every debt relief strategy has its advantages and shortcomings, and the full implications are best understood after a close consultation with a trusted adviser. That is the primary reason why people who have decided to take charge of their financial future should consult with a bankruptcy law firm.
A Texas bankruptcy lawyer can advise you about all of your options and help you assess which strategy best fits your particular circumstances. If Chapter 7 bankruptcy does not suit your needs, the Chapter 13 process may fit you better. Or your financial problems may be best solved with targeted solutions regarding mortgages and secured debts. Armed with knowledge and served by an advocate, a brighter financial future may be much closer than you would have dreamed.
Article provided by Rosenbaum Law Offices
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