Texas Bankruptcy Laws - Personal Property

§ 42.001. PERSONAL PROPERTY EXEMPTION. (a) Personal property, as described in Section 42.002, is exempt from garnishment, attachment, execution, or other seizure under Texas bankruptcy laws if: (1) the property is provided for a family and has an aggregate fair market value of not more than $60,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property; or (2) the property is owned by a single adult, who is not a member of a family, and has an aggregate fair market value of not more than $30,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property. (b) The following personal property is exempt from seizure in Texas bankruptcy and is not included in the aggregate limitations prescribed by Subsection (a): (1) current wages for personal services, except for the enforcement of court ordered child support payments; (2) professionally prescribed health aids of a debtor or a dependent of a debtor as defined by Texas bankruptcy laws; and (3) alimony, support, or separate maintenance received or to be received by the debtor for the support of the debtor or a dependent of the debtor. (c) This section does not prevent seizure by a secured creditor with a contractual landlord's lien or other security in the property to be seized. (d) Unpaid commissions for personal services not to exceed 25 percent of the aggregate limitations prescribed by Subsection (a) are exempt from seizure and are included in the aggregate.

Application of Texas Bankruptcy Laws Under the Code:

Pursuant to 11 U.S.C. 522(a)(2), "value'' means the fair market value as of the date of the filing of the petition or, with respect to property that becomes property of the estate after filing, the date property becomes property of the estate. Also, 11 U.S.C. 522(e) - non-enforceability of waivers - provides a waiver of an exemption executed in favor of a creditor that holds an unsecured claim against the debtor is unenforceable in a case under this title with respect to such claim against property that the debtor may exempt . . . and a waiver by the debtor of a power . . . to avoid a transfer . . . of exempt property . . . or to recover property or to preserve a transfer, is unenforceable in a case under this title. Texas bankruptcy courts must follow these rules.

Because of the unlimited homestead exemption, Texas bankruptcy laws are unique within all states. Be aware however, effective as of October 17, 2005, federal preemption limits the availability of exempt value in Chapter 7 and 13. The effect of preemption is to replace existing Texas statutes with the federal statute which provides less protection for debtors.

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