Tuesday, April 24, 2012

How to Determine the Debtor’s Homestead: Finding a Voluntary Designation

As most creditor’s discover, Texas homestead laws can be, well, complicated. The basic rule is sound: a debtor and his/her family can have only one Texas homestead. But when the debtor owns more than one piece of real property, or the debtor and his/her spouse own multiple pieces of real property, how can the creditor determine which property is the homestead under Texas law?

There are always a few exceptions, but in general, section 41.005 of the Texas Property Code governs the debtor’s voluntary homestead designation.  Essentially, the debtor must file a signed designation, acknowledged in the manner required for recording instruments, in the real property or official records of the Texas county in which all or part of the property is located. The designation must contain certain information, particularly a description sufficient to identify the property designated as homestead.  See Tex. Prop. Code § 41.005(c). It is always advisable for a creditor to check the official records held by the County Clerk’s office to determine whether any instrument filed in that county meets the statutory criteria for designation of the debtor’s homestead. 

Alternatively, the debtor may file an application for homestead exemption with the appraisal district for the county in Texas in which the property is located. See Tex. Prop. Code § 41.005(e). However, where the debtor has designated one property using this method and has also designated another property as his homestead by filing that instrument in the county clerk’s official records, the designation filed in the Texas official real property records will prevail over the debtor’s application for tax exemption. See Tex. Prop. Code § 41.005(e).

Article by Cynthia Veidt, Austin Attorney

Thursday, April 12, 2012

Debtors, Taxes and Bankruptcy

If you're a creditor and you wondered how taxes are handled in a bankruptcy, there is a good article on taxes and debtors in bankruptcy in the Texas Lawyer.  The link is here: http://www.law.com/jsp/tx/PubArticleTX.jsp?id=1202542728986&rss=tx&slreturn=1