Chapter 11 Bankruptcy Lawyers - Nick Davis Law

No, the Texas homestead exemption only applies to your primary residence. Rental properties, vacation homes, or secondary properties do not qualify for the homestead exemption and may be subject to liquidation in Chapter 7 bankruptcy. However, if you have equity in rental properties, you may protect them using other exemptions, such as the wildcard exemption under the federal system, or work with your attorney to negotiate payment plans under Chapter 13 or Chapter 11. If protecting investment properties is a priority, you should explore alternative strategies with legal guidance.

Texas offers robust protection for retirement accounts, ensuring that assets held in qualified accounts like 401(k)s, IRAs, and pension plans are fully exempt from creditors during bankruptcy. This protection covers both Chapter 7 liquidation and Chapter 11 reorganization cases. However, any funds withdrawn from these accounts before filing for bankruptcy lose their exempt status and could be included in the bankruptcy estate. Careful financial planning before filing can ensure that retirement savings remain protected, allowing you to safeguard your future even while managing current debt challenges.

In Texas, wages are generally protected from garnishment except in cases involving child support, alimony, student loans, or certain taxes. When filing for bankruptcy, your wages become part of your overall financial picture. In Chapter 7, wages earned after filing are usually safe from creditors, while in Chapter 13 or Chapter 11, your wages may be used to fund a repayment plan. Texas law does provide exemptions for tools of the trade, meaning you can protect earnings related to your profession. Your attorney will help you understand how wage protection works under Texas bankruptcy law and what income may be subject to garnishment.

Texas allows some personal property exemptions, but there are limits on how much you can protect when it comes to family heirlooms, art, or collectibles. These items may fall under the personal property exemption, which allows individuals to protect up to $50,000 in assets (or $100,000 for families). If the value of these items exceeds the exemption limits, the bankruptcy trustee could potentially liquidate them to repay creditors in Chapter 7 cases. You may need to consider creative solutions like using federal exemptions or negotiating their retention through Chapter 13 or Chapter 11 plans to protect high-value heirlooms or collectibles.

Yes, Texas allows you to protect certain business-related assets under the “tools of the trade” exemption. This exemption covers equipment, tools, and other assets necessary for your profession or business up to certain value limits. If you’re a business owner filing for Chapter 11 bankruptcy, this exemption can help you retain the equipment you need to continue operations while restructuring debt. However, if your business has significant assets beyond the allowed exemption, you may need to negotiate with creditors or reorganize through Chapter 11 to avoid liquidation.

Texas provides exemptions for certain types of life insurance policies. Whole life policies with a cash surrender value are often protected, but only up to a specified amount under Texas law. Term life insurance, which has no cash value, is typically exempt. Additionally, health insurance and disability insurance benefits are generally protected from creditors in bankruptcy. It’s important to review your insurance policies with your attorney to understand which types of coverage are protected and how to maximize asset protection during the bankruptcy process.

Yes, Texas offers an exemption for “tools of the trade,” which allows self-employed individuals to protect the tools, equipment, and other items necessary to continue their profession. This exemption can be critical for freelancers, contractors, or small business owners who rely on specific tools to earn a living. The value limit of this exemption is included in the overall personal property limit ($50,000 for individuals, $100,000 for families). If your tools exceed this limit, you may need to consider alternative options like Chapter 13 or Chapter 11 bankruptcy to keep essential equipment.

Cash and bank account balances are generally not protected under Texas bankruptcy exemptions. Any funds in your accounts at the time of filing can be part of the bankruptcy estate and used to pay creditors in a Chapter 7 case. In Chapter 13 or Chapter 11, cash may be used to fund a repayment plan. However, if you use federal exemptions, you may be able to protect a certain amount of cash under the federal wildcard exemption. Working with your attorney can help you strategize how to manage cash reserves and protect as much as possible before filing for bankruptcy.

Texas law allows you to exempt up to two firearms as part of your personal property exemptions. This exemption can be crucial for individuals who own firearms for personal safety or recreational use. The value of these firearms counts toward the overall personal property limit of $50,000 for individuals or $100,000 for families. If you own firearms exceeding these values or multiple firearms, you may need to consider alternative legal strategies to protect your assets during bankruptcy. An experienced attorney can help you navigate these exemptions to retain important personal property.

Texas’s “tools of the trade” exemption allows you to protect items directly related to your business or profession, such as machinery, equipment, computers, and other assets that are essential for generating income. This exemption is especially useful for professionals such as mechanics, electricians, and contractors who need specialized equipment to continue working. The value of exempt tools is included in the personal property limit, so if the value of your business tools exceeds the limit, you may need to explore other ways to protect these assets, such as filing under Chapter 11.

Non-exempt property is any asset that exceeds the allowed limits under Texas bankruptcy exemptions and is not protected. In Chapter 7 bankruptcy, non-exempt property is subject to liquidation by the trustee, meaning it can be sold to pay off creditors. In Chapter 13 or Chapter 11 bankruptcy, non-exempt assets may not be liquidated, but their value could affect the repayment plan you offer creditors. It’s crucial to carefully evaluate your property with your attorney to determine which assets are exempt and how best to handle any non-exempt property before filing.

In Texas, a community property state, most property acquired during marriage is considered jointly owned by both spouses. If only one spouse files for bankruptcy, community property may still be subject to the bankruptcy estate, potentially affecting both spouses’ assets. However, certain individual assets, such as separate property acquired before marriage or through inheritance, may remain protected. Your attorney can help assess which assets are community property and which are separate, ensuring that your spouse’s individual assets are protected as much as possible during the bankruptcy process.

Texas allows you to protect one vehicle per licensed household member under the state’s vehicle exemption. This exemption applies regardless of the vehicle’s value, so long as the equity in the vehicle does not exceed the exemption limit. If the vehicle’s equity is higher, it may be subject to liquidation in Chapter 7 bankruptcy. In Chapter 13 or Chapter 11, you may be able to keep your vehicle by including it in your repayment plan. If keeping your vehicle is critical, your attorney can help you explore options like reaffirming the loan or redeeming the vehicle to retain ownership.

Once you have chosen to use either Texas or federal exemptions in your bankruptcy case, you generally cannot switch after filing. Your decision is final for the duration of the case, so it’s crucial to evaluate your assets carefully before making this choice. An experienced attorney will help you weigh the benefits of each system to ensure you maximize asset protection and avoid losing valuable property. If you’re unsure which exemption system to use, your attorney can provide a thorough analysis to guide your decision.