If you’re thinking about bankruptcy, one question probably keeps coming back: will I have to give up my house? The fear of losing your house in bankruptcy stops a lot of people from getting help. For most homeowners in Texas, the answer is more reassuring than they expect. Here’s why, and the few situations where you still need to be careful.

Texas Protects Your Home No Matter What It’s Worth

Texas has some of the strongest homestead protections in the country. The Texas Constitution shields your primary residence from forced sale by most creditors, and there’s no dollar limit on its value. Instead, the Texas Property Code limits a homestead by acreage. A home in town can sit on up to 10 acres. A rural homestead can cover up to 100 acres for a single adult or 200 acres for a family.

What Happens to Your Equity?

This is where Texas really stands out. Because there’s no cap on value, you can protect home equity in bankruptcy even if your house is fully paid off. Say your home is worth $300,000 and you owe $100,000 on it. That $200,000 in equity is still yours after the case. In Chapter 7, a trustee can sell property that isn’t exempt to pay your creditors. A home covered by the bankruptcy homestead exemption in Texas isn’t on that list, so it can’t be sold to pay credit cards, medical bills or personal loans.

Are There Any Limits?

A few. First, the protection covers the home you actually live in. A rental house, a vacation property or a lot you’re holding as an investment doesn’t qualify. The other two limits are about timing. You generally need to have lived in Texas for at least 730 days before filing to use Texas exemptions. And if you bought your home within 1,215 days of filing, federal bankruptcy law may cap the protected equity at $214,000. Most longtime homeowners never run into either rule, but they matter if you moved here or bought recently.

The Exemption Doesn’t Cancel Your Mortgage

The homestead exemption protects you from unsecured creditors, not from the lender that holds your mortgage. If you stop making payments, that lender can still foreclose. The same goes for a home equity loan secured by the house, and unpaid property taxes can put the home at risk too. So the simplest way to protect your home in bankruptcy is to keep your mortgage current.

What If You’re Already Behind?

You still have options. Filing starts an automatic stay that can stop a foreclosure in its tracks. Chapter 13 then lets you catch up on missed payments over three to five years while you stay in the house. If you’re not sure which path fits, it helps to compare Chapter 7 and Chapter 13 before you decide.

Let’s Make Sure Your Home Is Safe

You shouldn’t have to guess whether your house is protected. At our office, Joel Gonzalez works as a home equity protection attorney in Corpus Christi and will review your property, your equity and your timing before you file. Contact us to schedule your free consultation.