Bankruptcy in Texas

Filing Bankruptcy in Texas

Texas requires filers to use state exemptions only. You cannot choose the federal exemption schedule. This means your homestead exemption is Unlimited value (10 acres urban, 100-200 acres rural), which is one of the most generous in the country — your primary residence is fully protected regardless of value.

Homestead Exemption: Unlimited value (10 acres urban, 100-200 acres rural)

The homestead exemption protects equity in your primary residence during bankruptcy. Texas is one of the few states with an unlimited homestead exemption — no matter how much your home is worth, creditors cannot force its sale in a Chapter 7 bankruptcy (subject to acreage limits). This makes Texas one of the most debtor-friendly states in the country.

After Discharge: Rebuilding Credit in Texas

Once your bankruptcy is discharged, the rebuild process is the same regardless of state. Open a secured credit card (the Discover it Secured is the best option with $0 fee and Cashback Match), keep utilization below 10%, and add a credit-builder loan within 6 months.

If you plan to form a business after bankruptcy, Texas's LLC filing fee is $300 through the Secretary of State at www.sos.texas.gov. You can begin building business credit immediately after discharge — bankruptcy only affects your personal credit file, not your new LLC's business credit profile.