Facing bills and unsure what cash you can keep if you file Chapter 7 in Texas? Among types of bankruptcies in Texas, Chapter 7 can wipe out many debts but raises clear questions about cash exemption limits and which assets count as exempt property. This article explains Texas bankruptcy exemptions, including the homestead exemption and the wildcard exemption, as well as how to claim them and what a bankruptcy trustee can take from bank accounts, paychecks, or savings. Looking for clear answers and practical steps to safeguard emergency funds and other exempt assets?
To help you act, Dallas–Fort Worth Chapter 7 bankruptcy lawyers at Warren & Migliaccio L.L.P. provide plain-spoken guidance on filing for Chapter 7, claiming exemptions, and preserving as much cash and property as the law allows.
What is Chapter 7 Bankruptcy?
Chapter 7 is a federal bankruptcy filing that wipes out many unsecured debts by selling nonexempt property and distributing the proceeds to creditors. You file a petition, list your debts and assets, and a court appoints a trustee to review your case.
The primary outcome people aim for is a discharge that eliminates qualifying debts, thereby canceling your debt obligation. Who uses Chapter 7? Individuals with limited income who fail the means test or have few nonexempt assets may be eligible for a fast reset.
How Chapter 7 Works: From Filing to Discharge
You file paperwork in federal bankruptcy court, and the automatic stay starts immediately, stopping most collection activity, wage garnishment, eviction efforts, and repossession for a time.
The trustee examines your schedules, challenges exemptions if needed, and may sell nonexempt assets to pay creditors. Most filings become no-asset cases because exemptions cover enough property to leave nothing for sale.
Non-Dischargeable Debts: What Chapter 7 Won’t Wipe Out
Creditors receive notice, and you attend the 341 meeting of creditors. If the trustee finds nothing to liquidate, the court issues a discharge of eligible debts about three to six months after filing. Certain debts do not get wiped out, including most child support, alimony, some taxes, and most student loans, unless you obtain a rare hardship ruling.
How Much Cash Can You Keep in Texas: Exemptions Explained
Texas does not use a single universal cash exemption. Instead, the state law lists categories of property that can be kept, and those rules determine how much cash you may protect. Cash tied to exempt categories often stays with you. For example, funds that are Social Security, unemployment, veterans’ benefits, or other public benefits generally qualify as exempt.
Money held inside retirement plans governed by federal law, like ERISA plans and many 401 (k) accounts, is generally protected from a Chapter 7 trustee. Bank accounts funded by exempt sources can be protected, depending on how the funds are categorized and how you claim exemptions on your schedules.
How to Protect Non-exempt Cash in a Texas Chapter 7 Bankruptcy
Personal property exemptions in Texas cover items such as household goods, certain jewelry, and tools of the trade, each subject to statutory limits rather than a blanket cash cap. Texas does not offer the kind of statewide wildcard exemption some other states do; instead, you choose from the Texas exemption statutes that attach values to specific property types.
That means raw cash in a bank account may be nonexempt unless you can tie it to an exempt category or an exempt asset.
What Practical Steps Help You Find Out Exactly How Much Cash You Keep?
- Gather bank statements, retirement account statements, and records that show where the money came from.
- List assets and claim exemptions on the bankruptcy schedules.
- Ask the trustee or a Texas bankruptcy attorney to review which statutory exemptions apply to your funds.
Understanding the Trustee’s Role in Liquidating Nonexempt Cash
Typical outcomes: many filers keep all their bank balances because exemptions protect the money, or because the trustee finds no administrable assets. When a trustee does identify nonexempt cash worth liquidating, they will convert it to pay unsecured creditors after covering allowed administrative and priority claims.
Want exact exemption numbers that apply to your situation? Tell me whether you own a home, vehicles, retirement accounts, or receive public benefits, and I will outline which Texas exemptions likely apply and what documentation the court expects.
Texas Cash Exemption Rules
Where Cash Fits In Texas Bankruptcy Law
Texas does not give you a separate cash exemption in bankruptcy. Cash on hand or money in bank accounts falls under the state personal property exemption, not a standalone cash rule.
The personal property exemption and the homestead exemption work separately, so cash protection comes from your individual property cap while your primary residence can be protected under homestead rules.
Texas Personal Property Exemption And Cash Limits
How much cash is exempt in Chapter 7, Texas? You can protect up to $50,000 in personal property if you file as an individual and up to $100,000 for a family under Texas law. That cap covers many items at once, so you allocate the exemption across all those categories when you claim exemptions, like:
- Cash
- Bank balances
- Household goods
- Certain vehicles
- Jewelry
- Tools of your trade
How To Apply The Exemption In A Chapter 7 Filing
When you file Chapter 7, you list every item of:
- Personal property
- State its value
- Claim exemptions
You decide how much of the $50,000 or $100,000 to assign to cash versus other assets. If you have significant money in the bank, you can designate part of your exemption to shield those funds, as long as the total claimed for all exempt items stays within the cap.
What if your cash exceeds the available exemption? The trustee could treat the excess as nonexempt estate property and use it to pay creditors unless you restructure assets or reach an agreement, so plan the allocation before filing.
Exempt Cash, Timing, And Wages
Wages earned after you file Chapter 7 are exempt and do not belong to the bankruptcy estate. Wages earned before you file, even if unpaid at filing, can become estate property and could be subject to trustee action unless covered by exemptions. This timing creates practical choices about when to file so you preserve the income you need for living expenses.
Common Questions People Ask
- How do I protect a recent paycheck or a tax refund?
Answer: You must claim those funds under the personal property exemption when you file, and provide clear records showing when they were earned or received.
- Can an attorney help maximize exemptions?
Answer: Yes. A lawyer will help you prioritize what to protect, cash for immediate needs, a vehicle, tools of the trade, or household goods, and advise on timing and valuation to reduce the risk of losing assets to the estate.
Focused Chapter 7 Help in Texas
Ready to protect what matters most with trusted Chapter 7 legal guidance from Warren & Migliaccio L.L.P.? Our experienced bankruptcy team provides clear, results-driven representation focused on helping clients protect exempt assets and start fresh under Chapter 7. Call (888) 584‑9614 to schedule a free consultation.
Federal vs. Texas Exemptions
You must choose either Texas exemptions or federal bankruptcy exemptions when you file Chapter 7 in Texas. You cannot mix parts of both. Which system you pick determines how much cash in bank accounts, savings, or a wallet will be protected from a Chapter 7 trustee.
Do you want to protect home equity or safeguard your money and miscellaneous assets? That decision drives the choice.
Texas Homestead Power: Protecting Your Home
If you use Texas exemptions, your primary residence gets strong protection. There is no dollar cap on homestead equity so long as you stay within the acreage rules: up to 10 acres inside a municipality or town and up to 100 acres in rural areas for a family.
That makes Texas homestead protection one of the biggest reasons filers choose state exemptions.
Texas Personal Property Exemption and Cash
Texas allows you to protect personal property up to $50,000 if you file alone, or up to $100,000 for a family. This category covers cash, bank deposits, checking or savings accounts, household goods, clothing, and similar items. You also get one vehicle exemption per licensed household member; each vehicle’s value counts toward the $50,000 or $100,000 cap.
Because Texas has no wildcard exemption, once your cash and other personal property exceed those caps, the excess is potentially reachable in Chapter 7.
Federal Wildcard and How It Protects Cash
Choose federal exemptions, and you get category caps plus a wildcard that can shelter cash and other miscellaneous property. As of 2025, the federal wildcard protects $1,475 of any property plus up to $13,950 of the unused portion of the federal homestead exemption.
That can give you roughly $15,425 of extra coverage for cash, bank accounts, or personal items that do not fit other categories. The federal homestead cap itself is much lower than Texas’s unlimited homestead, so homeowners with significant equity usually find state exemptions more useful.
How Much Cash Is Exempt in Chapter 7 Texas: Practical Numbers
- Using Texas exemptions: Cash in bank accounts and other personal property are protected within the $50,000 individual limit or $100,000 family limit. If you also own a qualifying homestead, that home equity is protected without a dollar cap within the acreage rules.
- Using federal exemptions: You can protect up to $1,475 plus as much as $13,950 of unused federal homestead as wildcard space in 2025, which can be applied to cash and savings. Federal category limits still apply to other item types.
- Retirement and public benefits: Most qualified retirement plans, 401 (k) funds, and many pension and public benefit payments like Social Security, VA benefits, and workers’ compensation are exempt under both systems and do not count toward these cash totals.
Scenarios That Illustrate the Choice
- Do you have a high equity home and modest bank savings?
Answer: Texas exemptions usually make more sense because the homestead shields the house.
- Do you rent, have little home equity, or hold significant cash and nonhomestead assets in the bank?
Answer: The federal wildcard can give you more flexible protection for money.
If your bank account balance plus other personal property exceeds $50,000 as an individual, expect careful analysis by a trustee in a Chapter 7 case.
Questions to Ask Before You File
- How much equity sits in your home?
- How large are your bank deposits and savings accounts?
- Are retirement funds involved?
- Do you have multiple vehicles or collectible items?
Answering these questions will guide you to the exemption set that best protects cash in Chapter 7 Texas.
Strategies to Maximise Your Exemptions
1. Texas Homestead Power: Protecting Your Home
The Texas homestead exemption protects your primary residence from most creditor claims, and it stands out because it does not cap dollar value when the property fits the acreage limits: up to 10 acres in a city and up to 100 acres for a single person in a rural area or 200 acres for a family. Mobile homes and houses both qualify if they serve as your principal residence. This protection commonly prevents a Chapter 7 trustee from forcing a sale to pay unsecured creditors when the property sits within the acreage limits.
Homestead protection does not directly translate into exempt cash, so if you plan to liquidate the house or receive sale proceeds, identify which exemptions will cover cash or bank accounts before you file.
2. Use Personal Property Exemptions Wisely
Texas lets you claim broad personal property exemptions that cover home furnishings, clothing, tools of the trade, and other household items, with a combined ceiling generally cited as $50,000 for a single filer and $100,000 for a family. That cap is the principal place where cash on hand or money in bank accounts can be protected as exempt cash or exempt bank accounts.
Prioritise Essentials and Protected Income
Prioritize exempting items you need to live and work: shelter and basic household property first, then tools you use to earn income, and then cash reserves. Also, check which public benefits and retirement accounts qualify as exempt under Texas law, because social security, unemployment, and many pensions usually escape liquidation and can reduce how much recoverable cash the trustee can claim.
3. Protect Vehicles Under Texas Exemptions
Texas permits an exemption for vehicles in a way that often protects at least one car for each licensed household member. To maximize that protection, document vehicle ownership, loan payoff amounts, and equity before filing.
If a vehicle’s equity exceeds the exemption, you can:
- Choose to reaffirm the loan with the lender
- Redeem the vehicle by paying the lien holder the allowed amount
- Surrender the car to the trustee
Each option affects how much exempt cash you must supply or how much potential unsecured debt you keep on your credit, so collect titles, registration, payoff statements, and recent bank records to show where payment or equity stands.
4. Keep an Accurate Inventory of Assets
An accurate, dated inventory prevents oversight and supports every exemption claim. List each asset, estimated value, ownership papers, and the exemption category you will claim, and attach documentation:
- Deeds and mortgage statements for the homestead
- Vehicle titles and loan statements
- Recent bank statements showing cash on hand and account balances
- Appraisals for high-value items
- Receipts for tools of the trade
Keep photographs and signed affidavits for possessions that lack formal bills of sale. A clear inventory makes it easier to show which funds qualify as exempt cash, which bank accounts you plan to protect under the personal property exemption, and which items the trustee should ignore.
5. Maximize Exemptions Under Texas Law Through Smart Planning
Strategic planning matters:
- Prioritize exempt categories that protect income
- Living essentials
- Transportation
- Retirement
Allocate the $50,000 or $100,000 personal property limit to cover the most critical assets and bank accounts. Avoid abrupt transfers to family or friends in the months before filing, because courts can reverse transfers that appear intended to hide assets.
Manage Cash Strategically Within Texas Chapter 7 Exemptions
If you hold more cash than the exemption allows, consider legitimate options such as paying secured debts, reinvesting in exempt property like necessary home repairs, or using funds for living expenses in a documented way before filing.
Determine the amount of cash exempt in Chapter 7 Texas for your situation, gather bank statements, and consult a bankruptcy attorney to explore options that align with the exemption rules and minimize the risk of trustee objection.
Call (888) 584‑9614 to Schedule Your Free Consultation
Chapters 7, 13, 11, and 12 frequently appear in Texas courts.
- Chapter 7 wipes out many unsecured debts through the liquidation of nonexempt assets under a trustee.
- Chapter 13 creates a court-supervised repayment plan based on your income and priorities.
- Chapter 11 handles larger business reorganizations and complex creditor arrangements.
- Chapter 12 offers a special path for family farmers and fishermen.
The path that fits you best depends on your income, property, and long-term goals for maintaining a home or vehicle.
We handle Chapter 7 (DFW) only; for other chapters, we provide referrals.
How Much Cash Is Exempt in Chapter 7 Texas: What Really Applies
Texas does not set a single cash exemption number that covers everyone. Instead, cash and cash equivalents are protected or exposed depending on the exemption category they fall under. Some funds are safe when they sit in exempt retirement plans or come from certain public benefits.
Other cash may be shielded as part of the homestead or as personal property items if they meet statutory limits. A trustee can claim some money that does not match any exemption category to pay creditors.
Common Texas Exemptions That Often Protect Cash or Cash Equivalents
Homestead exemption protects equity in a primary residence under Texas property and homestead rules. Retirement accounts that meet ERISA or qualified plan rules typically stay out of reach. Personal property exemptions include items such as:
- Household goods
- Tools of your trade
- Certain insurance proceeds
- Burial plots
Public benefits, recent wages up to statutory levels, and specific life insurance cash value receive protection under Texas law. Which specific exemption applies depends on where the money came from and how it is held.
How Exemption Selection and State Rules Affect Your Cash
Texas generally opts out of the federal bankruptcy exemption system, so most filers use Texas statutory exemptions found in the Texas Property Code and related statutes. That choice matters because Texas categories and limits differ from federal ones.
Exemption selection can change whether cash is treated as exempt. A trustee will review asset claims and may object if exemptions are improperly claimed. Your timing, residency, and how assets are titled influence which exemptions apply.
What a Chapter 7 Trustee Does With Nonexempt Cash
If cash is nonexempt, the trustee can seize it, liquidate other nonexempt items, and distribute proceeds to creditors after administrative fees. Most common practice in consumer cases is that trustees focus on assets that have value above exemptions.
Expect a meeting of creditors, document requests about bank accounts, and potential follow-up. Strategic use of exemptions and careful documentation often limits what a trustee can reach.
Practical Steps to Protect Cash Before Filing
Ask where your money sits and how it is titled. Consider whether funds can be legitimately moved into exempt accounts, like:
- Qualified retirement plans
- Subject to timing
- Fraud rules
Keep clear records of:
- Deposits
- Gifts
- Insurance payments
Avoid transfers that could be reversed as a preference or fraudulent conveyance. Run the means test and evaluate whether Chapter 7 or Chapter 13 gives you better control over cash and secured property.
Questions to Ask at a Free Consultation
- Which exemptions apply to my cash and bank accounts?
- Can my retirement or insurance proceeds cover shortfalls?
- How will filing affect joint accounts or property held with a spouse?
- What steps reduce the risk of trustee seizure?
- What are realistic outcomes for the discharge of unsecured debt and keeping my home or car?
- What fees should I expect from counsel and the court?
How Warren & Migliaccio L.L.P. Protects Your Family and Your Money
Warren & Migliaccio L.L.P. helps Texas families by matching bankruptcy strategy to each client’s life. Our experienced Dallas–Fort Worth Chapter 7 bankruptcy lawyers explain how exemptions work, review bank records with an eye for protected sources, and plan filings to reduce exposure to seizure.
Facing divorce, child custody, estate planning issues, or debt defense often changes the bankruptcy choices you make. Want clear guidance and a plan that fits your goals? Call our office at (888) 584-9614 for a free consultation and a focused review of your options.
