Living Trusts & Homestead Exemptions in Bankruptcy in Texas

13 Oct Living Trusts & Homestead Exemptions in Bankruptcy in Texas

In Texas, if you have a Living Trust and your home is owned by the Living Trust, you need to transfer it back to yourself before you file bankruptcy. Otherwise, you will lose your homestead exemption in bankruptcy. The Texas Property Code allows your living trust to claim your homestead exemption outside of bankruptcy. However, if you file for bankruptcy with the house still owned by trust, you are unable to claim the homestead exemption because the trust owns the home – not you.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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