If you are considering filing personal bankruptcy under Chapter 13, you may be concerned about keeping your possessions. Saving your home or car in a Dallas Chapter 13 bankruptcy is not as hard as you might think.
However, some of the rules are complicated, and you must follow them exactly. Reach out to a Chapter 13 bankruptcy attorney at Allmand Law Firm for help. Reed Allmand has deep experience in bankruptcy law and could help ensure you keep as much of your property as possible while meeting your repayment obligations.
How Exemptions Protect Important Property
Federal bankruptcy law protects specific possessions from liquidation or attachment by creditors. The protected property is called exempt property.
States can develop their own exemptions. A debtor can choose between the federal exemptions and those in their state. Debtors in Texas often choose the state exemptions, which are more generous than the federal allowances.
In a Chapter 13 bankruptcy, you pay your debts over time. You must pay at least the value of your non-exempt property, but property that comes within the exemption does not impact your repayment plan. A skilled Chapter 13 bankruptcy attorney could help you take full advantage of all the exemptions available to you, allowing you to save your home or car in Dallas.
What Does the Homestead Exemption Cover?
The homestead exemption under state law is quite generous. Your residence is exempt regardless of its value. However, there are limitations on acreage. You can protect up to 10 acres in an urban area, 100 acres for an individual living in a rural area, or 200 acres for a family living in a rural area.
If your home has a mortgage, you must make your mortgage payments during the time you are in bankruptcy. If you cannot afford your mortgage but want to keep the home, our attorneys could work to arrange a mortgage modification with the court and your creditors. Filing Chapter 13 immediately terminates any foreclosure actions, but your mortgage arrears will be included in your repayment plan.
You must have lived in Texas for at least two years to take advantage of the state’s homestead exemption. You must have owned the home you want to protect for at least 1,215 days. If you do not meet these requirements, you can still protect your home using Chapter 13, but you must use the more limited federal exemption. Our bankruptcy attorneys could answer any other questions you have about keeping your home or vehicle when filing Chapter 13 bankruptcy in Dallas.
Understanding the Vehicle Exemption
State bankruptcy exemptions also cover vehicles. You can exempt the total value of one vehicle for each member of your household with a driver’s license. However, the value of your equity in the vehicle counts toward the personal property exemption limits. According to Texas Property Code § 42.001, the total value of the personal property exemption is $50,000 for one person and $100,000 for a couple or family.
Repossession efforts must cease when you file Chapter 13 bankruptcy. However, you must make your car payments on time during the proceedings. If you owe more than the value of the car, you might be able to lower the amount you must pay. Speak with an experienced Chapter 13 bankruptcy attorney in Dallas to understand your options for saving your car or house.
Work With a Chapter 13 Bankruptcy Attorney To Protect Your Home and Car in Dallas
Many people assume that seeking protection from creditors through bankruptcy means giving up all the things they have worked to acquire. This is not the case.
Talk to an attorney at Allmand Law Firm about saving your home or car in a Dallas Chapter 13 bankruptcy. Protecting yourself from creditors may require adjustments in your spending and lifestyle, but you do not have to fear losing everything important to you. Call us today to discuss your options.
