Problem:
Many of the original settlers in Texas were debtors fleeing from creditors in other states. As a result, Texas bankruptcy laws generously protect a debtor's "homestead" from being seized by creditors. A "homestead" under Texas law can be as large as one acre in an urban area or 200 acres in a rural area. As a result of this exemption, Texas has become a haven for people in financial difficulty.
Some of those around the table, advocate the Texas homestead exemption, and argue that it is a great thing to provide a debtor with the essentials he or she needs to make a fresh start. Critics respond that the exemption is a dodge that debtors can use to hide their assets.
There is a pause in the discussion. Now is the chance to share the sharp legal thinking you have developed. Post your opinion on the discussion board.
Now you have really stirred up the conversation.
From my research I have gathered it is my understanding that within the state of Texas the Homestead Act was enacted to assist the wives/children of the settlers if their provider passed and it stopped them from losing their residence in a game of chance, etc. Yet, to be considered or qualify the home must be ones primary residence. There are (from what I gathered) certain tax breaks one can gather from this exemption. If you qualify it has the ability to lower the value of the home which decreases the amount of property taxes that are paid. However, I am confused in a few areas. Does the property owner get all forms of tax exemptions available such as the tax ceiling, county tax exemption, school tax exemption, etc. or just specific ones? Also, I understand that their home is exempt or protected in bankruptcy from creditors - but can the mortgagee take their home or it is exempt from them also? And is there a specific time frame an individual must live within the state to qualify for the exemption? My research showed that in order to qualify for the tax exemptions one must own the home/have it is as their primary residence January 1 of that year but I was unable to determine the time frame of residency within the state.
Any/all assistance would be greatly appreciated.