When The Texas Homestead Exemption Conflicts With The Snapshot Rule

Texas is known for being a debtor friendly state, and even has a strong homestead exemption written into its State Constitution. There have been issues that arise whenever the Texas homestead exemption comes into conflict with the federal snapshot rule. The Fifth Circuit Court of Appeals has recently contended with a conflict between the Texas homestead exemption and the snapshot rule in the case In re Brown. In that case a man filed for bankruptcy in 2013 and passed away shortly after. The court relied on the snapshot rule to hold that his surviving spouse could not claim a cash exemption that would be provided under State law because “all exemptions are determined at the time of filing and do not change based on subsequent events.” This decision means that debtors in Texas need to get things right at the time of filing because the snapshot rule will be enforced.  The full text of the Fifth Circuit Court of Appeals decision can be read here. 

See Hannah Geller, Not a Pretty Picture: The Snapshot Rule and Texas Homestead Exemptions, Bankruptcy Blog, December 3, 2015.