Thursday, May 3, 2012

How to Determine the Texas Debtor’s Homestead: Involuntary Designation

What does a creditor do when the debtor or his/her spouse owns more than one piece of property but has never made a voluntary homestead designation using the methods described in section 41.005 of the Texas Property Code? Or when the debtor has designated more than one piece of property as his/her homestead, and it is unclear which property constitutes the homestead entitled to constitutional protection from most types of debt?

Subchapter B of Chapter 41 of the Texas Property Code describes the method by which a judgment creditor seeking execution of a writ on certain real property can force the debtor to make an election for purposes of designating the exempt homestead. See Tex. Prop. Code § 41.021 et seq. First, the creditor must send a notice to the debtor containing the proper statutory language. If the debtor fails to respond, the judgment creditor must then file a motion with the court that issued the writ of execution, requesting that the court appoint a commissioner to determine the judgment debtor’s homestead. See id. at § 41.023. After appointment, the commissioner will submit a report concerning his/her designation, which shall be confirmed, rejected or modified by the court, as deemed appropriate. Id.

The reasonable costs and fees associated with this involuntary designation process “shall be” taxed against the judgment creditor as part of the costs of execution. Id.

Article by Cynthia Veidt, Attorney

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