When filing for bankruptcy in Texas, you are allowed generous personal property exemptions. These exemptions exclude designated personal property items from the bankruptcy process. Under the Texas bankruptcy code, a single individual (not part of a family) is allowed up to $30,000 in personal property exemptions. A family is allowed a maximum of $60,000 in personal property exemptions. Let’s look at what personal property types are included in the allowable exemptions.
Food is classified as exempt personal property, and so are home furnishings (including family heirlooms). Home furnishings include sofas, tables and other furniture. Video recorders, electrical equipment, and cordless phones are not considered home furnishings and cannot be included in personal property exemptions. Jewelry and unpaid commissions can also be claimed as personal property exemptions – however, both are limited to 25% of the total personal property exemptions ($30,000 for singles, $60,000 for families).
Clothing (anything you wear on your body, except for jewelry) is exempt under the Texas bankruptcy laws. Household pets and certain life insurance policies can also be claimed as exemptions. Tools of the trade are also exempt. Tools of the trade are defined as anything you must use to conduct your profession. For example, if you’re a landscaper, an expensive lawn mower may qualify under this exemption. Two firearms are also allowed to be claimed as exemptions. Bikes, tennis rackets, baseballs, treadmills and other exercise equipment can be claimed as personal exemptions. Only small personal equipment can be claimed under the sport equipment category. This means that boats, and other sports equipment designed for multiple people do not qualify under as an allowed exemption.
Wages received for personal service are completely exempt, except when they are being seized for child support payments. Self employed individuals are not protected under this exemption. Self employed wages will be treated as unpaid commissions and are included in the property subject to the exemption cap. Self employed wages cannot exceed 25% of the cap.
Health aids are exempt with no cap on their value. Health aids can include contact lenses, hearing aids, wheelchairs, glasses, and therapeutic equipment. Farming and ranching vehicles can be claimed as exemptions. Farm animals are also exempt (certain limits and conditions apply). Motor vehicles with 2, 3, or 4 wheels are also exempt. Only one motor vehicle exemption is allowed per family. Even if a family member does not have a driver’s license yet, you may be able to get a vehicle to qualify if the family member depends on someone else to transport them in the vehicle.