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Homestead Protection

Your house is also protected, up to a certain amount

If you own your home, Massachusetts homestead law may protect your home against the claims of many creditors. The law is M.G.L. c. 188.The homestead law only protects your home if:

  1. You live in the house or plan to live in the house.
  2. You use it or plan to use it as your “primary” residence – where you live most of the time.
  3. Manufactured or mobile homes are also protected by this law.

The homestead law does not protect the house from “secured” claims. If you promised to give your house to the lender if you do not pay your loan, your loan is secured. Mortgages are secured claims. If you do not pay your mortgage, homestead protection cannot stop the bank from foreclosing on your home.

Produced by Mariah Jennings-Rampsi, South Coastal Counties Legal Services, with funding from American College of Bankruptcy Foundation
Created June 2012

A Declaration of Homestead is a way to protect your home from unsecured creditors. The Declaration of Homestead protects the equity or cash value in your home.

To find out the equity you have in your home, get the fair market value of your home. Then subtract all mortgages, home equity loans and liens from the fair market value. The amount left is the equity you have in you home.

Example

If your home is worth $200,000 and you have a $150,000 mortgage, your equity is $50,000.

A Declaration of Homestead protects you from creditors who want to take your equity to repay the debts you owe them. If you do not have a declaration of homestead, creditors who have a lien on your property can foreclose. They can auction your home to get the money you owe them.

A Declaration of Homestead does NOT protect your home from mortgage companies or the government for tax or child support obligations.

What the Homestead does

As long as the mortgage, taxes and condo fees are paid regularly and on time, a Homestead declaration means:

  1. A creditor can not auction your home if any of the following people live there:
  • You,
  • other owners of your home,
  • family members who live in your home, and
  • any members of your family who move into your home in the future.
  • Even after you die, the homestead protection still protects these people.
  • Your spouse does not have to have his or her name on the title of the home to be protected.
  • If your family members have debts, creditors cannot sell your home to get money. Your family inherits the homestead protection while they are living in your home.
  • $125,000 is protected automatically

    In Massachusetts a $125,000 homestead protection is automatically on your home. You do not have to file anything to get the $125,000 homestead protection.

    For $500,000 protection, file a homestead declaration

    If your home is worth more than $125,000 you can get up to $500,000 in homestead protection, but you must file a declaration of homestead.

    How to Get a Declaration of Homestead

    1. Go to the Registry of Deeds in the county where your property is located. Homestead declarations for mobile or manufactured homes are filed with the Registry of Deeds in the county where the home is located, even if there is no deed on record for land.
    2. Ask the Clerk for a Declaration of Homestead form. Fill in the Book and Page number of your deed. Ask the Clerk if you need help.
    3. You will need a notary public to witness you signing the form.
    • All owners of the home can sign the homestead declaration but only one owner needs to sign it.
    • If a home is owned by a trust, the trustee can file a homestead declaration on behalf of the trust’s beneficiaries.
  • Return the completed form to the Registry of Deeds clerk to file the Homestead.
  • The fee is usually $35.00 to file the declaration.
  • Extra protection for the elderly and disabled

    Every home can get up to $500,000 in homestead protection by someone filing a homestead declaration. In addition, each owner who is 62 or older, or disabled can claim the $500,000 protection for him or her self. So, if you and someone else own your home together and either of you are elderly or disabled, you can protect your property up to $1,000,000.

    The elderly or disabled homestead protection ends when the elderly or disabled person dies. If there are two owners of a property and only one is elderly or disabled, the owner who is not elderly or disabled may also want to file a homestead declaration . This way if the elderly or disabled owner dies first, the person who is not elderly or disabled still has a homestead protection.

    What a Homestead does not do

    The homestead will not protect your property from all debts. The debts that are not protected by a homestead declaration are “priority” debts and secured debts. Government taxes, criminal fines, child support or support for a former spouse are priority debts

    If a lien was put on the house before you filed your homestead declaration, the homestead will not protect your house against that lien. When you take out a mortgage you promise to pay the creditor back the money you borrowed. You also promise if you do not pay the money back they can take your home. This is different from an “unsecured creditor” like a credit card where you only promise to pay back money. A homestead will only protect you against “unsecured creditors.”

    If you take out a mortgage on your home after you file a homestead declaration it will not protect your home from the mortgage company if you do not pay your bill. If you do not make mortgage payments the bank can foreclose and sell your home to get back the money they loaned you.
    If you sell your home to someone who is not in your family, or you abandon your home, you lose the homestead protection.

    If you have questions, talk to an attorney.

    Produced by Mariah Jennings-Rampsi, South Coastal Counties Legal Services, with funding from American College of Bankruptcy Foundation
    Created June 2012

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