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: Protect your equity with a declaration of homestead
Recording a declaration of homestead on your title is one way to ensure your hard-earned home equity is protected from creditors. This protects $300,000 or more depending on the median price of a home in your county. While the amount covers up to $600,000, this shield is adjusted annually based on inflation.
In order to qualify for a declaration of homestead:
your home must be occupied as your principal residence at the time a judgment is recorded against you; andyou or your spouse must continually reside in the home until the court determines your home is a homestead.
Creditors can’t force the sale of your home to collect a debt when the equity in your home is less than the homestead exemption you qualify for.
When your equity exceeds the amount of your exemption, a creditor may be able to force the sale of your home — but the dollar amount of your equity will be protected in the amount of your homestead exemption. You then have six months to reinvest your homestead amount in another residence.
You don’t have to pay a service to file the declaration form with the County Recorder, but if you need the form or have any real estate questions just give me a call!
