Claiming homestead on sole property in another state.

[looking4work]

I have been sued in Texas on a credit card debt, but reside in California most of the time while taking care of a relative.

I have no assets, savings or job. All I have is a joint ownership with my brother in a $75,000 home I live at in Texas, which on average is 2 to 3 months out of the year.

There is no mortage on it and my brother doesn't use it. When I am not living there it is vacant. I pay the property taxes on it every year and keep the utilities on, which I have been doing so for roughly 10 years.

Other than a partial ownership in the house in Texas and a bank account with $100 dollars, I don't own anything in Texas. My driver's license is from California but can't afford a car. At 60 it's been hard to find work.

1. How can I protect the home in Texas if I am living most of the year in California?

2. Can I file for bankruptcy in California and claim a homestead protection for my home in Texas?

3. Should I file for bankruptcy in Texas after restablishing my residence for 90 days?

Thanks.

[AngelinaCatHub]

In reality or theory, you cannot live in one state and homestead in another. You must live most of the year 51 percent in one homestead in one state. If you desire to protect the house from a Judgement, TX is a homestead state. BUT, you have to establish it and also (check your local state laws) here in FL you have Jan to Mrch to register for homestead, have your DL in the state you live and have lived there for six months. You can sign and record an affidavit of residency perhaps and get by. In FL they will check due to the snow birds that come here a month or two and get the Homestead exemption. Not a good idea. What keeps you in CA when you have a home in TX?

If you are being sued bk will toll the suit but you risk your half of the house then. Is the venue for the suit correct? What state did you violate the CC company? That would be where the suit must be made. 'Hub

P.S. Welcome first timer to our Family.

[looking4work]

Hi - I was notified by one of my neighbors in Texas that someone tried to serve me with a summons and found out it was a law firm for a credit card company. I have not been officially served since I'm not in Texas.

I live in California taking of a relative. The credit card was issued in California and all payments were made from California, so my guess is that they are trying to go after the home in Texas.

The only thing I can establish is that I have made property tax and utility payments on the Texas property for ten yeras, but have lived there intermitently

[HHM]

I'd be shocked if any state allowed you to claim a homestead in a property that is not your primary residence. Homestead means just that, you "live" in the house, it is your home. If not your true home, no homestead.

Homestead is a non-starter given what you have shared so far.

[angles]

Kalifornia has a half decent home exemption. When I filed it I could have exempted 75K for a house or 25K in misc. exemptions. If you don’t have anything else to protect you could use the house exemption since the house is paid off. It may have increased by now.

[btbeme]

If your brother lived there he could file a homestead and protect that amount from the Trustee. Is he nearby? What does TX law say?

Other than that, I'd say that the house is pretty much Trustee fodder. CA exemptions have a generous wildcard exemption, but not generous enough. First, you need to be sure of the home value. If it comes in at $75k, you have about $38k exposure. CA exemptions allow about $16k in wildcard exemptions (ask an attorney), leaving about $22k exposure. Deduct a reasonable amount for sales costs (8% or so) means the Trustee will likely see about $15-18k in front of him.

Certainly, consult a BK attorney about the possibility that the Trustee would try to grab and sell the house (pretty likely, given that it is otherwise vacant and therefore uncomplicated); or, ask about selling the house and exempting the proceeds. I'm not sure that claiming your portion of a Texas home as a CA home exemption would fly, but ask. All things considered, if you really don't want the home to be at risk, you will need to file in TX after checking off all the required boxes for qualifying. Reestablishing a TX residency and filing homestead would get the house away from the creditors, and the lack of a job makes you judgement proof anyway, so time might be on your side if you move quickly.

This is a muddy one.

Grabbing at straws here. Time for a sharp attorney, maybe in TX first.

[AngelinaCat]

The problem is that the house is vacant for the majority of the year. The brother in Texas does not live in the house, and based on the original post, it seems like he isn't even in the area.

I don't know how liberal CA's homestead laws are, but I seriously doubt that CA Homestead Laws will apply to a mostly empty home in Texas....

[HHM]

I don't think there is anything muddy about it. The OP will not be able to claim a "homestead" in the Texas Property. The OP, by admission, doesn't live there, end of story on the homestead. Now, if the OP chooses CA exemption scheme 2, which is basically a large wild card exemption, he can use it to exempt equity in that property, but the OP won't be able to say the TX property is a homestead.

[looking4work]

Unfortunately, my brother doesn't live in Texas so it would be hard for him to declare a homestead exemption.. Even if he could it would probably only apply to his 50% share in the house.

I like the idea of the CA wildcard exemption. Can you please expound on it and how I could use the Wildcard to protect my 50% equity in the home?

Assuming I could do that in California, what would happen to my brother's remaining 50% equity. Would the creditor be able to go after it? He doesn't owe anything to this creditor.

[LadyInTheRed]

I like the idea of the CA wildcard exemption. Can you please expound on it and how I could use the Wildcard to protect my 50% equity in the home?

Assuming I could do that in California, what would happen to my brother's remaining 50% equity. Would the creditor be able to go after it? He doesn't owe anything to this creditor.

If you use Exemption System 2, you have a wild card that can be used on any property. The wild card is $1,175, plus any portion of the $22,075 in homestead exemption you don't use. Since it sounds like you would use no homestead exemption, you would have a wild card of $23,250 to apply to your share of the equity in the Texas property.

The trustee cannot take your brother's interest. But, he can force the sale of the property, pay the expenses of sale and then pay your brother his share of the proceeds, pay you your exemption amount and then keep what's left of your share of the proceeds to distribute to creditors. The more of your equity you can exempt, the less attractive the property is to the trustee. An attorney familiar with your trustee can best advise you of how likely the trustee is to keep the property. But, over $14,000 in equity may be attractive. One option would be for your brother to buy your non-exempt interest from the trustee if he is able and willing. Is it possible the property is worth less than you think?

For full details on California exemptions see my blog: http://www.bkforum.com/entry.php?336...tcy-Exemptions

[looking4work]

Thank you Lady in Red, it makes total sense what you're saying. The house is in a rural area and the fair market value would be around 50k to 60k. It's not exactly a thriving metropolis!

Will California allow me to claim an exemption on the home even if it's in another state (Texas)? If so, I'll file bankruptcy in California. Hopefully, the trustee won't sell it, since it may nor even fetch 50k let alone 60

[btbeme]

Will California allow me to claim an exemption on the home even if it's in another state (Texas)?

Absolutely. You will need a copy of the deed for the home showing joint ownership. You will also need to show insurance on the home. On the paperwork, you will need at least two reasonable values for the home - say, a quote from Zillow and a valuation (called a CMA) from a realtor in the area. Those should establish a good baseline value for the Trustee. If the Trustee wants a better idea, let the Trustee spend his own time and money getting an appraisal. Don't do the Trustee's homework for them, but have a good argument stating market value.

Once you have a number, let your attorney do the rest. The attorney might make adjustments on the value for "quick sale price" and/or selling costs to show what your actual equity might be. The closer to zero, the better. Again, if the Trustee sees that these values are legitimate, they will accept them.

Apply your wildcard to cover as much equity as possible, with zero left over being the goal. Truth is, most Trustees will hesitate to do much unless they see a real probability for good monetary recovery in the sale of the house, especially if it is out of state. If your numbers are reasonable and well-presented, that will make the Trustee think twice.

As a last resort, the Trustee might want a cash settlement from you, or from your brother buying your equity stake in the house. That can be negotiated.

[looking4work]

As a last resort, the Trustee might want a cash settlement from you, or from your brother buying your equity stake in the house. That can be negotiated.

Why would a trustee want a cash settlement from me if the property is exempt under the wild card? Wouldn't that defeat the whole purpose of the California exemption? I don't have any cash to give to anybody which is why I am considering bankruptcy!

Also, what does my brother have to do with my debt to the creditor, since his 50% share in the house is owned by him?

[LadyInTheRed]

Why would a trustee want a cash settlement from me if the property is exempt under the wild card? Wouldn't that defeat the whole purpose of the California exemption? I don't have any cash to give to anybody which is why I am considering bankruptcy!

Also, what does my brother have to do with my debt to the creditor, since his 50% share in the house is owned by him?

If you can't exempt all of your interest in the property you or your brother can by the non-exempt portion from the trustee to prevent the trustee from forcing a sale. Your brother has no obligation to do that, but if he doesn't want the house sold, that is how he could prevent it. He would then have more than a 50% interest in the home.

[looking4work]

It sounds very risky and if the trustee can sell the home, then the wildcard doesn't mean anything. I am better off going back to Texas and reclaiming my residency. At least I can prove that I have lived in the house and have paid the taxes and utilies on it for years.