September 18, 2012 by Robert Tharp at 12:00:00 am
Texas home and property owners enjoy particularly robust protections from creditors that shield against the forced sale of a home to meet the demands of creditors. What many donít know is that these safeguards can be traced directly to early Texas history when founders were motivated to make the state attractive to settlers.
Many Americans who settled in Texas in the early nineteenth century were pursued by their creditors, and for their protection Stephen F. Austin recommended a moratorium on the collection of the colonists' foreign debts, notes the Handbook of Texas Online.
"Early leaders wanted to settle the state as quickly as possible," explains bankruptcy lawyer Frances Smith of Dallas-based Shackelford Melton & McKinney. "To encourage settlers to move to Texas, founders advertised generous homesteads, which were protected from creditors." As a result, Texans' homesteads Ė the land and house they occupy Ė always have been exempt from general creditor claims. This generally covers up to 10 acres of urban land, and up to 200 acres of rural property. "Texas doesn't cap the value of your homestead," adds Smith. "Some states will say you get your homestead up to $25,000 or $30,000, but Texas does it by the land area, so it doesn't matter what the dollar value might be. Whether your 200 acres is worth $2 million or $200,000, it doesn't matter. Each of your 200 acres is protected."
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