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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37971
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I am a sr. who closed on a reverse mortgage 10 months ago.

Customer Question

I am a sr. who closed on a reverse mortgage 10 months ago. My question to you is:
are proceeds from a reverse mortgage creditor proof and subject to the same 6 month exempt to exempt reinvestment time frame as proceeds from the sale of a home in order to maintain their judgement-proof exempt status?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 6 years ago.

Nothing in the Texas Code or any case law provides for the treatment of reverse mortgage proceeds as if they were from the sale of a homestead. However, that still leaves the issue open to challenge, based on the theory that the borrower does in fact operate in the same manner as an installment sale.

 

I could see a court going either way on the issue. So, it's a coin toss.

 

Hope this helps.

 

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