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 PROTECTING YOUR HOME BY RECORDING A HOMESTEAD DECLARATION
Your home may be protected from creditors by law. There are two types of homestead protection. The first type is automatic with regard to the home that you live in. If your home is involuntarily sold to satisfy a judgment, or if it is damaged or destroyed or acquired for public use, it will allow an exemption pursuant to Code of Civil Procedure Section 704.730 as follows:
"§704.730. Amount of Homestead Exemption
(a) The amount of the homestead exemption is one of the following:
(1) Fifty thousand dollars ($50,000) unless the judgment debtor or spouse of the judgment debtor who resides in the homestead is a person described in paragraph (2) or (3).
(2) Seventy-five thousand dollars ($75,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead a member of a family unit, and there is at least one member of the family unit who owns no interest in the homestead or whose only interest in the homestead is a community property interest with the judgment debtor.
(3) One hundred twenty-five thousand dollars ($125,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead any one of the following:
(A) A person 65 years of age or older.
(B) A person physically or mentally disabled and as a result of that disability is unable to engage in substantial gainful employment. There is a rebuttable presumption affecting the burden of proof that a person receiving disability insurance benefit payments under Title II or supplemental security income payments under Title XVI of the federal Social Security Act satisfies the requirements of this paragraph as to his or her inability to engage in substantial gainful employment.
(C) A person 55 years of age or older with a gross annual income of not more than fifteen thousand dollars ($15,000) or, if the judgment debtor is married, a gross annual income, including the gross annual income of the judgment debtor's spouse, of not more than twenty thousand dollars ($20,000) and the sale is an involuntary sale.
(b) Notwithstanding any other provision of this section, the combined homestead exemptions of spouses on the same judgment shall not exceed the amount specified in paragraph (2) or (3), whichever is applicable, of subdivision (a), regardless of whether the spouses are jointly obligated on the judgment and regardless of whether the homestead consists of community or separate property or both. Notwithstanding any other provision of this article, if both spouses are entitled to a homestead exemption, the exemption of proceeds of the homestead shall be apportioned between the spouses on the basis of their proportionate interests in the homestead."
To get greater protection, and to discourage creditors from forcing a sale of the home in the first place, some owners file a Declaration of Homestead. By recording a Declaration of Homestead, an owner is also protected when the residence is voluntarily sold. Either way the proceeds, up to the statutory limit, are exempt for six months and continue to be exempt if reinvested in a new home.
If your house is protected by a declared homestead, many creditors find that it isn't worth the trouble to force a sale.
You should be aware that a Homestead Declaration affords no protection from involuntary sale resulting from Federal or State Tax Liens or any loan where the property is used as collateral (for example, mortgages), home equity loans or child support obligations.
For more information, please contact Group Law Service at 661-325-3425.
The information contained in the Chain-Younger Web Site is general in nature and is not intended as a substitute for legal advice. In addition, an
Attorney-Client relationship is not created by viewing this information.
Changes in the law or the specific facts of your case may result in legal
interpretations that are different from those presented. To protect your
legal rights following severe injury or wrongful death resulting from an
accident, it is wise to immediately consult Chain-Younger.
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