When filing for bankruptcy, you may be able to keep your home; however, this will depend on your particular situation and which chapter of bankruptcy you decide to file. Chapter 13 bankruptcy allows you to keep your property (including your car and home) as long as you keep up with your payment plan, which usually lasts three to five years.Generally, it is easier to keep your house when filing for Chapter 13 bankruptcy, rather than Chapter 7 bankruptcy.
Because Chapter 7 bankruptcy discharges most of your unsecured debts, the trustee may sell any non-exempt property you own—which may include your home. However, the particular divisions of exempt and non-exempt property largely depends on state law. You may research the particular laws of your state or consult an experienced bankruptcy lawyer to determine your options.
STATE VS. FEDERAL PROPERTY EXEMPTIONS
There are federal bankruptcy property exemptions as well as state bankruptcy property exemptions. In Texas, you may choose to either use federal or state exemptions; you cannot use both. Certain federal exemptions will apply regardless of which you choose, but it is important to know the difference between the two in order to choose the list that best suits your particular case.
Property that is typically exempt from bankruptcy includes:
- Musical instruments
- Partial home/car equity
- Public benefits
- Retirement funds
THE TEXAS HOMESTEAD EXEMPTION MAY HELP YOU KEEP YOUR HOME!
Texas offers a homestead exemption for residences on 10 acres or less in a village, town, or city, as well as residences on 100 acres or less in the country. If you sell your house, the proceeds are protected by the homestead exemption for six months after the sale. Additionally, the Texas motor vehicle exemption may allow you to exempt the entire value of one motor vehicle per household member, as long as they have a license, or if an unlicensed member relies on another person to operate the vehicle.
Consult with a knowledgeable Dallas bankruptcy attorney about property exemptions for further information on how state and federal property exemptions may help you keep your home!