A homestead law helps to protect you from losing your home to creditors. If you are sued for money in court and lose, the person who sued you will receive a judgment from the court. If you do not pay the judgment, they can then try to collect the judgment by garnishing your wages, having your automobile sold or by having you home sold. The homestead law protects a certain amount of your equity in your home from being taken to pay the judgment.
Texas has two distinct laws for designating a homestead. The Texas Tax Code offers homeowners a way to apply for homestead exemptions to reduce local property taxes. The Texas Property Code allows homeowners to designate their homesteads to protect them from a forced sale to satisfy creditors. This law doesn’t protect homeowners from tax foreclosure sales of their homes for delinquent taxes.
The homeowner must file a claim for homestead exemption with the state, and will not receive the protections of the law until this has been done. Furthermore, the protection can be lost if the homeowner abandons the protected property by taking up primary residence elsewhere.
Texas' homestead exemption has no limit on dollar value of the homestead with a 10 acres limit inside a municipality (the urban homestead) and 100 acres outside a municipality (the rural homestead). The rural acre allotment is doubled for a family--200 acres can be shielded from creditors in Texas for a rural homestead. The Texas homestead 'includes all substantially affixed items' on the homestead--houses, swimming pools, a water tower, barn, pumps, roads, etc.
Contact Texas Homestead Services and protect your home & real property today!
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