Exemptions

Texas vs. Federal Exemptions

Many people don’t realize that in Texas, there is a homestead exemption that protects one’s home while filing bankruptcy.

In Texas, there are two exemption schemes: state (Texas) and federal.

The main reason debtors would choose Texas exemptions is if they had a lot of equity in their home or if they had annuities, life insurance proceeds, inherited IRAs, or some other asset specifically exempted under Texas law.

Otherwise, the better option for most people is federal exemptions because there is a wild card exemption of roughly $14K that allows debtors to protect cash, stocks, bonds, refunds, etc.