Homes in Bankruptcy

Texas and Florida are the only states in the Union that provide an unlimited homestead exemption. That means that no matter how much your house is worth, one cannot lose it in a bankruptcy.

It is easy to have a homestead in Texas. There are only two basic requirements for the standard urban home: 1) one must own it personally (not through a trust or a corporation) and 2) one must live in it. There are exceptions relating to living elsewhere and renting it, or a rural homestead that is much larger than the urban home and others.

However, if the debtor has placed more than approximately $140,000 of actual equity (not interest payments) into his homestead during the 1215 days prior to filing bankruptcy, he can lose the excess.

Also, if the debtor files bankruptcy he must have lived in Texas for more than 730 consecutive days in order to take advantage of the Texas exemptions.

Charles Chesnutt