Heart Attack Leave Texas Couple Vulnerable to Creditors, But Their Home is Safe.

DALLAS--(BUSINESS WIRE)--Oct. 6, 1998--Mike W., whose heart attack last year cost him his job, says it best: "I've lost my job and can't pay my finances," Mike W. wrote in a letter last year to Homestead Recording Services.

His identity is being withheld to shield him from ever-pursuing creditors.

"I was really worried about my home I just bought," he continued. "I was afraid of losing it to the creditors until your company helped me with the Homestead Filing."

Mike W., age 44, moved into his new home with his wife last year, just about the same time he had his heart attack. Though it was a mild one, it was enough to keep him from continuing to work. His illness left him homebound with his wife, who also suffers from medical problems.

Though they have been able to collect regular social security payments, Mike W. and his wife have not been able to keep up their mortgage and medical costs. Until he heard about Homestead Recording Services last year, Mike W. resigned himself to the possibility of losing his new house.

But after receiving a Designation of Homestead promotion in the mail, Mike W. learned about a little-known Texas law that allows property owners to exempt their property from collection suits, bankruptcy proceedings and other creditor claims.

The law, called Designation of Homestead, is often confused with another homestead law in the state that allows property owners to claim a Homestead Tax Exemption. The designation homestead law has nothing to do with taxes. Instead, the law provides protection for homeowners' property when times get tough financially.

Homestead Recording Services, for a $25 fee, will prepare the documents protecting your property from creditors and other claims. For an additional $22, the company, who can be reached at 800/400-1693, will file the document in your local circuit court.

That's what Homestead Recording Services did for Mike W., who now sleeps a little easier knowing that his roof will stay over his head in the years to come.

Under the terms of the new amended Designation of Homestead law, homeowners who file for a homestead tax exemption may be eligible and receive the protection for their home under homestead designation about 10 months later. The amendment was part of an effort by legislators to merge the two homestead functions of tax exemption and homestead protection.

In the past, the two functions were separate, requiring individual filings for tax exemption and for homestead designation protection.

Although the amendment will link the two functions under one filing, it will not guarantee the homestead protection function at the time of filing or any time thereafter.

For one thing, the 10-month window between the time of the tax exemption filing and the automatic homestead protection leaves homeowners vulnerable to creditor claims within that time frame. The 10-month window could possibly be extended to nearly two years if you weren't eligible for that year's tax exemption.

"I'm real grateful for the day I got that promotional in the mail," he said. "Those folks were real efficient, and I'm glad they were able to take care of it for me.

"I'm not sure I could've done it on my own," Mike W. added.

By: Matt Burgard