Texas Bankruptcy Laws - Miscellaneous Exemptions

§ 42.0022. EXEMPTION FOR COLLEGE SAVINGS PLANS. (a) In addition to the exemption prescribed by Section 42.001, a person's right to the assets held in or to receive payments or benefits under any of the following is exempt from attachment, execution, and seizure for the satisfaction of debts: (1) any fund or plan established under Subchapter F, Chapter 54, Education Code, including the person's interest in a prepaid tuition contract; (2) any fund or plan established under Subchapter G, Chapter 54, Education Code, including the person's interest in a savings trust account; or (3) any qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986, as amended. (b) If any portion of this section is held to be invalid or preempted by federal law in whole or in part or in certain circumstances, this section remains in effect in all other respects to the maximum extent permitted by law.

Application of Texas Bankruptcy Laws Under the Code:

According to 11 U.S.C. 522(l) The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section. If the debtor does not file such a list, a dependent of the debtor may file such a list, or may claim property as exempt from property of the estate before the Texas bankruptcy court. Unless a party in interest objects, the property claimed as exempt on such list is exempt. The trustee, creditors, an interested party, or the court upon it's own motion, may file an objection to exemptions designated within a debtor's schedule. Denial requires notice to debtors and hearing.

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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