This has not been a good year for Texas homesteads involved in bankruptcy proceedings. In April, the Fifth Circuit ruled (after nearly two years under advisement) that the non-filing spouse does not have a separate homestead estate entitled to protection when the other spouse files bankruptcy, or, as happened in this case, has an involuntary petition brought against him. Kim v. Dome Entertainment, Inc. (In re Kim), No. 10-10882 (5th Cir. 4/9/14), which can be found here
. While the legal reasoning of the decision is solid, it is a blow to those of us who consider the Texas homestead to be sacrosanct.What Happened Odes Ho Kim purchased a home in Irving, Texas for $1,048,028.36 which he occupied with his spouse Chong Ann Kim. About two years later, Dome Entertainment Center obtained a judgment against him in California for more than $5 million. Dome then filed an involuntary petition against Mr. Kim in Texas. Because the home was acquired less than 1,215 days before bankruptcy, Dome objected that Mr. Kim's homestead exemption was limited to $136,875. The Bankruptcy Court sustained the objection. Mr. Kim then filed a declaratory judgment seeking to determine Mrs. Kim's interest in the property. Dome intervened. Judge Harlin "Cooter" Hale ruled that 11 U.S.C. Sec. 522(p) preempted the unlimited Texas homestead exemption and that Mrs.