What is exempt and non-exempt property? (Bankruptcy)
“Exempt” property are the things that cannot be taken away from the debtor to pay back the money owed. “Non-exempt” property are the things that can be taken away from the debtor to pay back money owed. There are lists saying what things are exempt and what are non-exempt under both federal law and Texas law.
In Texas, a person who files a Chapter 7 bankruptcy can choose to use either the Texas or federal exemptions. Texas and federal property exemptions are different. Before choosing which exemptions to use, a debtor has to compare the property he owns to the federal exemption list and the Texas exemption list to see which is better.