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Texas Bankruptcy Laws
Exemptions are the major differing factor among state bankruptcy policies.Texas law has a common method for exemptions through Chapter 7 bankruptcy, allowing for exemptions through a choice of either the federal or their state regulations, which are:
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Homestead |
Of 10 acres or less in town or 100 acres or less out of town |
Personal Property |
Worth up to $30,000 or $60,000 for a head of household |
Pensions |
No limit |
Public Benefits |
Crime victims, worker’s compensation and unemployment |
Tools of the Trade |
Farming or ranching vehicles and other tools |
Insurance |
Life insurance proceeds |
Miscellaneous |
Burial plots, health aids, child support and alimony |
After the best-suited method for bankruptcy is decided, the bankruptcy petition can be filed. This is done by an inventory of all of the debtor’s assets. This process should be done very accurately to avoid the possibility of bankruptcy fraud, especially when filing for Chapter 7 bankruptcy. In addition, a “means test” must be passed to gain eligibility for Chapter 7. Generally, after 20-40 days, if the petition is accepted, creditors will be notified, & a “341 meeting” will be arranged with them by a bankruptcy trustee to assess the situation. This meeting is very important for Chapter 11 & 13 bankruptcy, as the repayment plan will be created.
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