Texas Bankruptcy Exemptions: Full Attorney Guide for October 2026
You already know exemptions decide what your client walks away with. What catches filers off guard is the cash. Texas offers no dedicated exemption for money in a plain bank account, so a filer with low home equity often does better under the federal wildcard. A homeowner with real equity almost always stays state. We'll map both lists, the acreage and residency rules, and the exact point where one path beats the other.
TLDR:
- Texas exempts unlimited home equity (capped by acreage), one vehicle per licensed driver, and up to $50,000 in personal property, or $100,000 for a family.
- Cash has no Texas exemption; federal exemptions shield it with a wildcard up to $15,800 for low-equity filers.
- Pass the 2026 means test (about $66,837 for one filer, effective April 1, 2026) to qualify for Chapter 7; homeowners with equity lean Chapter 13.
- The 730-day residency and 1,215-day homestead rules ($214,000 cap on recently acquired homes, effective April 1, 2025) decide which exemptions apply, so timing your filing matters.
- Glade applies Texas statute limits with attorney override and a deterministic means-test engine, collapsing 8-plus hour petition assembly into under 2 hours.
What Texas Bankruptcy Exemptions Actually Protect
The first question every Texas debtor asks before filing is simple: what do I actually get to keep? Exemptions answer it. They are the property the trustee and creditors cannot reach, protected by statute even when debts go unpaid.
Texas sits among the most generous states. A filer keeps a primary residence with unlimited equity, a vehicle per licensed driver, retirement accounts, and a substantial amount of personal property, with a higher cap for a family.
For attorneys, bankruptcy law exemptions decide whether a case is worth filing. For debtors, they determine what survives.
The Texas Homestead Exemption: Unlimited Equity With Acreage and Timing Limits
Texas protects your home in a way almost no other state does. Under Texas Property Code Sections 41.001 and 41.002, you can exempt unlimited equity in a primary residence, capped only by acreage: up to 10 acres in an urban area, and in rural areas up to 100 acres for a single adult or 200 acres for a family.
One federal overlay narrows this. The Bankruptcy Code limits the exemption to $214,000 when the home was acquired within the 1,215-day window (11 U.S.C. § 522(p), adjusted April 1, 2025), though equity rolled over from a prior Texas home during that window does not count.
Sell the house, and the proceeds stay exempt for six months, giving you time to reinvest in a new homestead without exposing the cash to creditors.
The Texas Motor Vehicle and Personal Property Exemptions
Texas exempts the full value of one motor vehicle per licensed household member under Property Code Section 42.002(a)(9). A member without a license still qualifies if someone else drives for them.
Personal property falls under Chapter 42, and the list is broad:
- Home furnishings, including family heirlooms
- Tools, equipment, and books used in a trade or profession
- Wearing apparel and two firearms
- Jewelry, capped at 25 percent of the aggregate limit
- Athletic and sporting equipment, including bicycles
Texas Bankruptcy Exemptions at a Glance
Asset / Category | Exemption Amount or Limit | Texas Statute |
|---|---|---|
Homestead (urban) | Unlimited equity; max 10 acres | Tex. Prop. Code §§ 41.001-41.002 |
Homestead (rural, single adult) | Unlimited equity; max 100 acres | Tex. Prop. Code §§ 41.001-41.002 |
Homestead (rural, family) | Unlimited equity; max 200 acres | Tex. Prop. Code §§ 41.001-41.002 |
Homestead sale proceeds | Exempt for 6 months post-sale | Tex. Prop. Code § 41.001 |
Personal property (single adult) | Up to $50,000 aggregate | Tex. Prop. Code § 42.001 |
Personal property (family) | Up to $100,000 aggregate | Tex. Prop. Code § 42.001 |
Motor vehicle | Full value; 1 per licensed household member | Tex. Prop. Code § 42.002(a)(9) |
Jewelry | Up to 25% of personal property cap | Tex. Prop. Code § 42.002 |
Firearms | Up to 2 | Tex. Prop. Code § 42.002 |
Animals & livestock | 2 horses/mules/donkeys + tack; 12 cattle; 60 other livestock; 120 fowl; household pets (within aggregate cap) | Tex. Prop. Code § 42.002 |
Food & clothing | Within personal property aggregate | Tex. Prop. Code § 42.002 |
Burial plots | Exempt | Tex. Prop. Code § 41.001 |
Health aids | Exempt | Tex. Prop. Code § 42.002 |
Retirement / pension accounts | Fully exempt (most tax-qualified plans) | Tex. Prop. Code § 42.0021 |
Current wages | Exempt from garnishment on unsecured judgments | Tex. Labor Code § 61.001 |
Life insurance / annuity proceeds | Exempt (many policies) | Tex. Ins. Code § 1108.051 |
Exemption limits apply to equity (market value minus secured debt), not the full asset value. Married couples filing jointly may each claim a full set of exemptions where applicable.
All of it counts against a single aggregate cap: $50,000 for a single adult, $100,000 for a family. That cap is the ceiling attorneys measure client assets against before filing.
Retirement Accounts, Wages, and Insurance Exemptions
Three categories catch filers off guard, and each keeps long-term savings intact.
Most qualified retirement and pension accounts stay fully protected, and the assets in most trusts, pension, retirement, and profit-sharing plans sit beyond a creditor's reach under Texas law. Current wages for personal services are exempt from garnishment, so an ordinary paycheck cannot be seized on an unsecured judgment. Many life insurance and annuity proceeds are shielded too.
Together, these streams are what make so many Texans effectively judgment proof: the income arrives and the savings survive, even with an unpaid judgment on the books.
Texas State Exemptions vs. Federal Bankruptcy Exemptions
Texas lets you choose: file under the state scheme or the federal set under 11 U.S.C. 522(d). Pick one list in full. No mixing categories.
The federal amounts, effective through March 2028, favor renters and low-equity filers because of a portable wildcard: any filer who skips the homestead exemption can apply up to $15,800 of it to any property, on top of the $1,675 base wildcard.
Run the math on a renter with $18,000 in a bank account and no home. Texas shields none of that cash, so the trustee reaches all of it. Go federal instead: skip the homestead exemption and the unused-homestead wildcard (up to $15,800) plus the $1,675 base wildcard cover $17,475, leaving only about $525 exposed. Now flip the facts to a homeowner with $120,000 of equity and little cash. Federal caps homestead equity at $31,575, exposing roughly $88,000; Texas exempts the equity in full. Same two lists, opposite winners, and the deciding variable is where the client's value sits.
Property category | Federal amount |
|---|---|
Homestead equity | $31,575 |
Motor vehicle equity | $5,025 |
Household goods (aggregate) | $16,850 |
Wildcard (any property) | $1,675 |
Unused homestead wildcard | up to $15,800 |
A filer with little home equity often does better federal: the unused-homestead wildcard protects cash Texas leaves exposed. A homeowner with real equity almost always stays state.
How Exemptions Work Differently in Chapter 7 and Chapter 13
In Chapter 7, the trustee liquidates anything nonexempt and pays creditors, so your exemption list decides what you keep outright. In Chapter 13, you keep everything, but nonexempt value sets a floor: unsecured creditors must receive at least their Chapter 7 liquidation value. For a broader overview, the AI for bankruptcy law 2026 guide covers how these calculations are being automated. That liquidation analysis drives your plan payment.
Texas Chapter 7 Income Limits and the Means Test
Exemptions decide what you keep. The means test decides whether you can file Chapter 7 at all. It runs the six-month income lookback against the Texas median for your household size.
Fall below median and you presumptively qualify. The 2026 Texas Chapter 7 income limits (effective April 1, 2026) run roughly $66,837 for one filer, $86,714 for two, $99,273 for three, and $117,962 for four, and AI-powered exemptions and paystubs can help firms process these figures faster, adding about $11,100 per additional member. Always verify the current U.S. Trustee table before filing, as these figures update every six months.
Above median, complete the full disposable-income calculation on Form 122A-2. These figures update on the U.S. Trustee schedule, so verify the current table before filing.
Timing Rules, Residency, and Exemption Mistakes to Avoid
Which state's exemptions apply turns on the 730-day residency rule: file before you have lived in Texas two full years, and the prior state's exemption law may control instead. The 1,215-day homestead cap sits on top of that.
Do not convert nonexempt cash into exempt assets, like paying down the homestead, right before filing. Trustees read those transfers as fraudulent conversion, which is one reason a custom-built AI solution for bankruptcy firms includes flags for pre-filing transfer patterns, and fraud within the ten-year window strips homestead protection by the amount attributed to it. Document the source and timing of any recent asset move before you file, so a legitimate transfer does not read as a concealment. Watch the residency and homestead clocks together: the choice of exemption scheme, the acreage caps, and the recent-acquisition limit all turn on dates, not intentions. Pull the filing forward or hold it a few weeks and a client can land in a different exemption regime entirely. Run the timing math before the petition goes out.
Over-claim or misclaim, and the trustee objects. Claim accurately, document the basis, and the exemption holds.
What Happens to Nonexempt Property and Unpaid Judgments
Nonexempt property has two fates. In Chapter 7, the trustee sells it and distributes the proceeds. In Chapter 13, you keep it and pay its value into the plan over three to five years.
Outside bankruptcy, an unpaid judgment does not authorize self-help. A creditor must record an abstract of judgment, then use a writ of execution to seize nonexempt personal property or garnish a non-wage bank account. Specialized service agents for bankruptcy can automate the tracking of these post-judgment actions across active cases. Texas wages stay off-limits.
Community property complicates this: a judgment against one spouse can reach community property both manage, though the other spouse's separate property and sole-management assets often stay protected. When every income stream and asset is exempt, the debtor is judgment proof, and the creditor collects nothing until that changes.
Filing Bankruptcy in Texas: Courts, Costs, and Trade-offs
Texas runs four federal bankruptcy districts: Northern, Southern, Eastern, and Western. The Southern District's Houston division handles a large share of consumer filings. You file where you have lived for most of the past 180 days.
Court filing fees are fixed nationally: $338 for Chapter 7 and $313 for Chapter 13. Attorney fees vary by complexity, running higher for Chapter 13 because representation spans a multi-year plan.
- Chapter 7 discharges qualifying unsecured debt in months, but you must pass the means test and surrender nonexempt property.
- Chapter 13 stops foreclosure and keeps nonexempt assets, but commits disposable income to a three-to-five-year plan.
Below-median filers lean Chapter 7. Homeowners behind on payments, or above-median earners, lean Chapter 13.
How Bankruptcy Software Handles Exemption Calculations at Scale
Run 60 Texas cases a month and exemption math stops being a per-case judgment call and becomes a repeatability problem. That is where the case for end-to-end bankruptcy filings with Glade AI agents starts. Every homestead determination, statute selection, and means-test comparison has to land correctly across each file, and a spreadsheet lagging an April median income update is malpractice exposure waiting to surface.
Glade's Exemption AI Agent applies Texas statute limits with attorney override, while a deterministic means-test engine, not AI guesswork, auto-loads current U.S. Trustee median tables. AI agents typically pre-populate up to 50 to 75 percent of petition fields before paralegal review, collapsing an 8-plus hour assembly into under 2 hours, and the attorney approves every schedule. Firms weighing the switch can see how Glade AI bankruptcy handles petition prep.
Final Thoughts on Working Through Texas Bankruptcy Exemptions
Texas gives you generous ground to stand on, but the outcome still turns on choosing state or federal exemptions, clearing the income limits, and claiming accurately. Homeowners with equity usually stay state; low-equity filers often gain from the federal wildcard. Line those choices up and you protect what counts. Learn more about how Glade AI supports bankruptcy firms, or book a demo to see how Glade handles exemption math case after case.
FAQs
How much cash is exempt in Chapter 7 in Texas?
Texas offers no dedicated cash exemption, so money in an ordinary bank account is exposed unless it traces to protected wages, retirement, or another exempt category. Filers who need to shield cash can choose the federal exemptions instead, which apply the wildcard (up to $1,675 base plus up to $15,800 of unused homestead) to any property, including bank balances.
Should I use Texas exemptions or federal exemptions for Chapter 7?
Bias toward Texas exemptions if you own a home with real equity, since Texas protects unlimited homestead equity that the federal $31,575 cap leaves partly exposed. A renter or low-equity filer usually does better federal, because the unused-homestead wildcard shields cash and personal property that Texas leaves unprotected. Pick one full list; you cannot mix categories.
What's the fastest way to run exemption math across 50+ Texas cases a month?
Use bankruptcy software that applies Texas Property Code statute limits automatically and loads current U.S. Trustee median income tables without manual updates. Glade's Exemption AI Agent handles jurisdiction-specific limits with attorney override, while its deterministic means-test engine runs court-defensible math instead of AI guesswork, so an April median update never leaves a spreadsheet stale across every open file.
What is the 730-day residency rule for Texas exemptions?
The 730-day rule determines which state's exemption law applies: file before you have lived in Texas two full years and the prior state's exemptions may control instead. The 1,215-day homestead cap sits on top of this, limiting recently acquired Texas home equity to $214,000 (adjusted April 1, 2025) unless it rolled over from a prior Texas homestead.
Can a judgment against me reach my spouse's property in Texas?
Yes, in part. A judgment against one spouse can reach community property that both manage, but the other spouse's separate property and sole-management community assets often stay protected. When every income stream and asset is exempt, the debtor is judgment proof and the creditor collects nothing until that changes.