A lender takes a $40,000 lien on a Texas homestead to secure an unsecured credit card balance from 2024. Assuming this is not a properly structured home equity loan or another constitutionally authorized debt, may an ordinary credit-card debt be secured this way?
Correct Answer
C) Void: a homestead lien is valid only for a debt that section lists
Section 50(c) allows a homestead lien only for an authorized debt. The scenario expressly excludes a compliant home equity loan and other permitted categories. Debt consolidation can be financed through a compliant home equity transaction; it is not categorically forbidden. Consent or a low loan-to-value ratio alone does not validate this ordinary credit-card lien. Source: Tex. Const. art. XVI, sec. 50(c)
Why This Is the Correct Answer
Section 50(c) allows a homestead lien only for an authorized debt. The scenario expressly excludes a compliant home equity loan and other permitted categories. Debt consolidation can be financed through a compliant home equity transaction; it is not categorically forbidden. Consent or a low loan-to-value ratio alone does not validate this ordinary credit-card lien. Source: Tex. Const. art. XVI, sec. 50(c)
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