Can You Save Your Assets During Bankruptcy in Texas?

 Posted on December 06, 2023 in Bankruptcy

Filing for bankruptcy may seem scary because it requires you to surrender property to pay debts. However, Texas bankruptcy law allows the protection of certain assets through exemptions. Proper pre-bankruptcy planning will enable you to minimize liquidations and lawfully keep more of your wealth. A Texas lawyer can help you follow the proper steps for the best outcome for you.

Texas Offers Generous Exemptions

The key to saving assets in bankruptcy relies on claiming all available exemptions. Exemptions remove eligible property from liquidation during the proceedings so creditors cannot seize and sell the assets. Luckily, Texas legislation provides more generous exemptions compared to most other states.

Critical Texas bankruptcy exemptions include:

• Homestead Exemption: Texas offers unlimited home equity protection, insulating your primary residence regardless of property value. This applies in both Chapter 7 and Chapter 13 bankruptcy filings.
• Personal Property Protection: Texas law exempts $100,000 per family in personal property value, safeguarding household goods, electronics, musical instruments, firearms, and more.
• Retirement Account Exclusions: Most tax-advantaged retirement plans receive 100% protection, including 401(k)s, IRAs, annuities, pensions, and Texas employee accounts.

Strategic Asset Transfers Are Allowed

Where legally possible, transfer valuable non-exempt assets out of your name before bankruptcy. For example, you might gift business shares to your family ahead of time or sell luxury items to obtain exempt proceeds. Make sure you evaluate any appropriate transfers that align with regulations. An attorney can guide you on appropriate timing and recipient selection according to asset type. Rely on legal advice to ensure the transfers stand up to court examination if necessary.

Proactive Asset Protection Planning

You can protect assets by using planning strategies executed well before needing to file bankruptcy. Such advanced preparations may incorporate homestead declarations, asset protection trusts, limited partnerships, and other exempt entities that protect wealth according to your goals. With strategic timing-guided legal representation, you can implement structures that allow extensive future asset preservation. For instance, your attorney may advise transferring the title of a paid-off rental property into an asset protection trust two years prior to any bankruptcy filing. Proactively planned and adequately timed, such actions are upheld under court review to let you keep assets.

Contact a Kerrville, TX Bankruptcy Lawyer

To see if you are eligible or have the potential to protect assets through financial troubles, work with a New Braunfels, TX bankruptcy attorney. Call Law Offices of Chance M. McGhee at 210-342-3400 to get started with your free consultation and see how you can protect your assets.