Texas law protects homeowners from certain debt collection practices. One of the protections is the “homestead exemption,” which in general prohibits a creditor from forcing the sale of a debtor’s home to collect on a debt. If a creditor nevertheless takes action against homestead property, the debtor has legal remedies available.
When a creditor sues a debtor for nonpayment and wins a judgment, the creditor can put a lien on the debtor’s property. A lien is a legal notice that the creditor is attempting to collect the judgment from the value of the property. Creditors can put liens on most any home because it is up to the owner to show that the Texas homestead exemption applies. Not all homes qualify for the exemption. The homestead law allows debtors to shield only their primary residence from creditors collecting debts.
A property lien can be a big problem if and when the owner decides to sell or refinance the home. The lien shows up on the land records associated with the property and is called a “cloud on title.” A prospective buyer or refinancing lender will insist on the lien being cleared from the title before completing a sale or refinance. Removing the lien then becomes a time-sensitive priority for the homeowner.
Fortunately, Texas law provides a procedure for discharging certain liens placed on homestead property after September 1, 2007. Qualifying debtors may obtain partial releases of judgment liens so that they don’t affect subsequent purchasers or mortgagors. However, the procedure applies only to homesteads that meet the law’s definition. Furthermore, the process can be complicated and there are strict time and documentation requirements, all of which require the attention of a skilled debt defense attorney.
If a creditor threatens to put a lien on your home or has already done so, you should seek the advice and counsel of an experienced attorney. At the Law Office of David A. Fernandez, P.C., we focus our practice on consumer protection law. Please contact us online or call 713-893-8509 for an initial consultation.
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