Exemption Limits

While Bankruptcy law is Federal, many exemptions are determined by state law. As of the writing of this web page, a brief survey of the information available on the internet revealed that virtually all sources reported exemptions incorrectly. Frequently, they were simply not up to date – some for many years. Be very careful where you get information on exemption limits.

Exemptions are treated differently depending on which Chapter of Bankruptcy you are filing. In a Chapter 7, they establish a dollar limit for certain categories of property that you are allowed to keep through your bankruptcy. Equity or value, over the exemption limit, can be bought from the bankruptcy estate or could lead to property seizure. If you know your exemption laws, then you can know what is going to happen before you file and plan accordingly – no surprises!

Determining the categorization of property and which exemptions to apply is a task best left to experienced attorneys familiar with the exemption levels set by the laws of your state.

To give you an idea of what to expect, here are the exemptions in Texas: