A homestead declaration could save your house from creditors

If you are a homeowner looking for a way to protect your house by keeping creditors at bay, you might want to check into a homestead declaration.

A homestead declaration is a document that protects the equity in your house up to a certain amount, which varies from state to state. It also protects your house from being sold to pay off a lien filed against the property if you have less equity in the house than the lien or judgement.

This document can only be filed on your primary residence and needs to be filed prior to the incident occuring in order for the protection to be valid. Taxes, first or second mortgages, mechanic's liens and liens that are the result of covenants, conditions and restrictions on your property do not fall under the protection of a homestead declaration.

You can file a homestead declaration yourself by completing a form and having your signature witnessed in front of a notary. Then you will need to take the declaration to the county recorder's office to have the document filed properly. If you are just purchasing your house, you can choose to file a homestead declaration once you have closed escrow on the house and are the title holder of record.

Please note that homestead declaration laws vary from state to state. Connect2Agent offers this post as advice about your options in homeownership protection, but does not hold a license to practice law, nor does it profess to dispense legal advice.

As with all things legal, the best source to consult if you are considering a homestead declaration is an attorney. Your best option is an attorney who specializes in real estate or whose practice deals solely in real estate law.

If you enjoyed this post, you may want to read:

• Connect2Agent takes a look at foreclosures
• Understanding the basics of short sales
• Homeowners: How to detect foreclosure scams

Subscribe in a reader    OR    Subscribe to Connect2Agent - Home Buyers and Sellers by Email

Posted by Rebecca D. Levinson