Filing Chapter 7 Bankruptcy in Texas (2026)
Reviewed by DocDraft Legal Team · Texas · Last updated August 18, 2026
Chapter 7 bankruptcy is federal law, but the property you keep is often set by Texas. Texas is a choice state: a Texas filer may elect either the federal 11 U.S.C. 522(d) exemptions or the generous Texas exemptions, and you pick one set in full. Texas is best known for its unlimited-value homestead under Property Code 41.001, capped only by acreage, along with a large personal property exemption and strong wage protection. This page explains the Texas homestead size limits, the vehicle and personal property figures, the means-test median income, and the four federal bankruptcy courts where Texans file. Chapter 7 discharges most unsecured debt but not most student loans, recent taxes, or child and spousal support.
Does Texas use state or federal bankruptcy exemptions?
Texas is a choice state, not an opt-out state. Under 11 U.S.C. 522(b) a Texas filer may elect either the federal 522(d) exemption list or the Texas state exemptions, but not both. You choose the one set that protects more of your property. Many Texas homeowners pick the Texas set for its unlimited-value homestead.
Can I keep my house if I file Chapter 7 in Texas?
Usually yes. The Texas homestead exemption under Property Code 41.001 is unlimited in dollar value and limited only by size: up to 10 acres for an urban home, or 100 rural acres for a single adult and 200 rural acres for a family under 41.002. If your homestead fits the acreage cap, Chapter 7 generally lets you keep it.
Can I keep my car if I file Chapter 7 in Texas?
Usually yes. Texas exempts one motor vehicle for each licensed household member under Property Code 42.002(a)(9), and vehicle value counts toward the aggregate personal property cap of $50,000 for a single adult or $100,000 for a family under 42.001. Most household vehicles are fully protected if you elect the Texas exemptions.
What is the income limit to file Chapter 7 in Texas?
For cases filed on or after July 15, 2026, the U.S. Trustee median income figures for Texas are $66,837 for one earner, $86,714 for two, $99,273 for three, and $117,962 for four, adding $11,100 per additional person. At or below your household figure, you pass the first part of the means test.
Texas Is a Choice State With an Unlimited-Value Homestead Capped by Acreage
Texas is a bankruptcy choice state. Unlike opt-out states, Texas does not force filers onto its own exemption list: under 11 U.S.C. 522(b) a debtor filing in Texas may elect either the federal 522(d) exemptions or the Texas exemptions, choosing whichever single set protects more property. Texas is famous for the most generous homestead in the country. Under Property Code 41.001 the homestead is unlimited in dollar value, and Property Code 41.002 caps it only by size: up to 10 acres for an urban home, or 100 rural acres for a single adult and 200 rural acres for a family. Texas pairs this with a large personal property exemption under Property Code 42.001, which caps aggregate personal property at $50,000 for a single adult or $100,000 for a family, covering the categories in 42.002 such as one motor vehicle for each licensed household member, home furnishings, tools of a trade or profession, apparel, and limited livestock. Current wages for personal services are generally exempt under 42.001(b)(1), and tax-qualified retirement accounts and IRAs are exempt under 42.0021. Because the Texas homestead has no dollar cap, many homeowners choose the Texas set; renters with little home equity sometimes prefer the federal 522(d) list for its portable wildcard. Texans file in one of four federal bankruptcy courts: the Northern, Southern, Eastern, or Western District of Texas, based on where they have lived for most of the prior 180 days.
Relevant Laws
Texas Homestead Exemption (Property Code 41.001 and 41.002)
Section 41.001 exempts the homestead from seizure with no limit on its dollar value. Section 41.002 caps it only by size: 10 acres for an urban home, and 100 rural acres for a single adult or 200 rural acres for a family. This is why many Texas homeowners keep their house in Chapter 7.
Texas Personal Property Exemption (Property Code 42.001 and 42.002)
Section 42.001 caps aggregate personal property at $50,000 for a single adult or $100,000 for a family, and exempts current wages for personal services under 42.001(b)(1). Section 42.002 lists the covered categories, including one motor vehicle per licensed household member, home furnishings, and tools of a trade.
Texas Retirement and Savings Plan Exemption (Property Code 42.0021)
Exempts tax-qualified savings plans, including pensions, profit-sharing and 401(k) plans, and individual retirement accounts and annuities, including Roth and inherited IRAs. This provision is separate from and additional to the $50,000 or $100,000 personal property cap under 42.001.
Federal Bankruptcy Code Exemptions and Means Test (11 U.S.C. 522, 707)
The federal law behind Chapter 7. Section 522(b) lets a debtor in a choice state like Texas elect either the federal 522(d) list or the state exemptions, and section 707(b) sets the means test measured against state median income.
Regional Variances
Texas Chapter 7 Exemption Table
Homestead
Property Code 41.001 and 41.002: unlimited in dollar value, limited only by size. An urban homestead is capped at 10 acres; a rural homestead is capped at 100 acres for a single adult and 200 acres for a family. Equity within the acreage cap is fully protected.
Motor vehicle
Property Code 42.002(a)(9): one motor vehicle is exempt for each member of the household who holds a driver's license, or who relies on another to drive it. Vehicle value counts toward the aggregate personal property cap under 42.001.
Wildcard
Texas has no separate cash wildcard exemption. Filers who need to protect cash or non-homestead assets sometimes elect the federal 522(d) list instead, which offers a portable wildcard under 522(d)(5). Under the Texas set, protection comes from the broad personal property categories in 42.002.
Personal property
Property Code 42.001: aggregate personal property up to $50,000 for a single adult or $100,000 for a family. Property Code 42.002 covers home furnishings, food, apparel, jewelry (limited), tools and equipment of a trade or profession, two firearms, athletic and sporting equipment, and limited livestock and forage.
Wages
Property Code 42.001(b)(1): current wages for personal services are exempt and are not counted against the aggregate personal property cap, except for court-ordered child support. Texas strongly limits wage garnishment, so most Texas paychecks are protected from ordinary creditors.
Retirement
Property Code 42.0021: tax-qualified savings plans are exempt, including pensions, stock bonus, profit-sharing, annuity, and 401(k) plans, and individual retirement accounts and annuities, including Roth and inherited IRAs. ERISA-qualified plans are also excluded from the bankruptcy estate under federal law.
Suggested Compliance Checklist
Confirm the current Texas means-test median income
Before you file days after startingCheck your household size against the U.S. Trustee Texas median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $66,837 for one, $86,714 for two, $99,273 for three, and $117,962 for four, adding $11,100 per additional person.
Complete the pre-filing credit counseling course
Within 180 days before filing days after startingTake an approved credit counseling course from a provider authorized for your Texas district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed.
Choose federal or Texas exemptions and value your assets
Before preparing your schedules days after startingDecide between the Texas exemptions, with the unlimited-value homestead under Property Code 41.001, and the federal 522(d) list with its portable wildcard. Value your home, vehicles, and personal property so you can match assets to exemptions. You must choose one set in full under 11 U.S.C. 522(b).
Prepare and file your petition and schedules
Filing day days after startingFile your petition, schedules, and exemption claims in the correct court: the Northern, Southern, Eastern, or Western District of Texas, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment.
Attend the 341 meeting and finish the debtor education course
Before discharge days after startingAttend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm the current Texas means-test median income | Check your household size against the U.S. Trustee Texas median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $66,837 for one, $86,714 for two, $99,273 for three, and $117,962 for four, adding $11,100 per additional person. | - | Before you file |
| Complete the pre-filing credit counseling course | Take an approved credit counseling course from a provider authorized for your Texas district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed. | - | Within 180 days before filing |
| Choose federal or Texas exemptions and value your assets | Decide between the Texas exemptions, with the unlimited-value homestead under Property Code 41.001, and the federal 522(d) list with its portable wildcard. Value your home, vehicles, and personal property so you can match assets to exemptions. You must choose one set in full under 11 U.S.C. 522(b). | - | Before preparing your schedules |
| Prepare and file your petition and schedules | File your petition, schedules, and exemption claims in the correct court: the Northern, Southern, Eastern, or Western District of Texas, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment. | - | Filing day |
| Attend the 341 meeting and finish the debtor education course | Attend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions. | - | Before discharge |
Frequently Asked Questions
No. Texas is a choice state. Under 11 U.S.C. 522(b), a debtor filing bankruptcy in Texas may elect either the federal 522(d) exemptions or the Texas state exemptions, whichever protects more property, but cannot mix the two sets. Because the Texas homestead has no dollar cap, many Texas homeowners choose the Texas exemptions.
The Texas homestead exemption under Property Code 41.001 is unlimited in dollar value. Property Code 41.002 limits it only by size: an urban homestead is capped at 10 acres, while a rural homestead is capped at 100 acres for a single adult and 200 acres for a family. Value inside those acreage limits is fully protected.
Under Property Code 42.001, Texas exempts aggregate personal property up to $50,000 for a single adult or $100,000 for a family. The covered categories in Property Code 42.002 include one motor vehicle for each licensed household member, home furnishings, food, apparel, tools of a trade, and limited livestock. Current wages for personal services are separately exempt under 42.001(b)(1).
No. Chapter 7 discharges most unsecured debt like credit cards and medical bills, but it does not erase most student loans, recent income taxes, child support, or spousal support, and it will not discharge debts from fraud. Secured debts like a car loan remain unless you surrender the collateral or reaffirm the loan.
You file in the federal bankruptcy court for your area: the U.S. Bankruptcy Court for the Northern, Southern, Eastern, or Western District of Texas. The Southern District covers Houston, and the Western District covers Austin and San Antonio. You file where you have lived for most of the prior 180 days.
Other Texas guides
Ready to Draft Your Document?
Get AI-powered legal documents with attorney review included. Plans start at $39.99/mo.