Finding yourself trapped under a mountain of debt can be frightening and alienating. 

In the United States, debt is often wrongly associated with things like a lack of financial control, but in reality, we often find ourselves struggling because of factors outside of our control.

If you’re stuck at the bottom of a well of debt, bankruptcy might just be the ladder you need to climb your way out. Luckily, Texas is one of the most debtor-friendly states in the country. Filing bankruptcy doesn’t mean you have to give away all of your possessions. 

In fact, there are several different types of bankruptcy exemptions in Texas.

Check out the exemptions below to get an idea of what the bankruptcy process might look like for you and your business. If you’re struggling financially, contact the Law Offices of Phillippe and Associates to know if filing business bankruptcy might be right for you.

How Exemptions Can Affect Your Business Bankruptcy Claim

There is one exemption in Texas that affects business owners.

In Texas, debtors are allowed to keep the “tools of the trade.” However, this is included in the personal property exemption, so it will be limited to $100,000 and counts against other personal property you will be able to keep. 

Other business assets are liable to be liquidated and sold by your bankruptcy trustee. 

Texas Homestead Exemption

In some states, the deductions available for a debtor’s primary residence is limited, meaning that residences above a certain value might not be exempt. In Texas, these deductions are unlimited. This exemption doesn’t apply to the size of the lot, just the amount of equity. Residences of more than 10 acres in an urban area or 100 acres in a rural area may not be fully exempt.

If you decide to sell your home, you may not be able to keep the proceeds. This largely depends on the timing. Texas is lenient on debtors, but that doesn’t mean you can “play the system.”

Motor Vehicle Exemption

When filing for bankruptcy, one of the first things filers ask is if they can keep their vehicle. In Texas, you can keep one vehicle for every license holder living in your primary residence. This includes license holders too young or too old to drive regularly. 

Exemptions may also be made for non-license holders who rely on being transported in a vehicle. This is not limited by the market value of the vehicles in question.

Personal Property Exemption

Beyond residences and vehicles, Texas offers a range of exemptions for additional types of “personal property.” These exemptions are limited by the value of the items in question. This means a family can only keep $100,000 worth of equity while an individual–in this case, a business owner–can only keep $50,000. 

Common items that may be covered under this type of exemption include the following.

  • Home furnishings
  • Family heirlooms
  • Jewelry
  • Livestock (specific limits are placed on species)
  • Two firearms
  • Tools used in a profession

Tools used in a profession can be any equipment needed to do your job. This could potentially include office appliances, tools, or other equipment.

The Law Offices of Phillippe and Associates: Your Brownsville Bankruptcy Lawyers

If you’re struggling with financial burdens, it’s important that you know that filing for bankruptcy isn’t a financial death sentence. After you file, it won’t take long before you can begin rebuilding your credit, and, as we’ve shown, you may be able to keep the majority of your possessions.

It’s worth noting that funds in your bank account won’t be exempt when you file bankruptcy.


If you are facing significant financial struggles, bankruptcy may be your way forward; don’t hesitate to contact our team of Brownsville business bankruptcy lawyers.

Book a FREE 1-Hour Consultation