Understanding the Homestead Exemption
People who find themselves struggling with heavy debt have enough worries as it is. Constant calls from creditors, rapidly increasing debt, and difficulty paying for everyday needs can drastically impact your quality of life. Many people have found relief from debt by filing for bankruptcy, but many others are afraid of losing important property such as their homes. Thanks to a doctrine known as the homestead exemption, a home can be protected from creditors, making bankruptcy that much easier.
The homestead exemption is designed to protect the value of a home against seizure by creditors, the death of a loved one, and other extreme circumstances. If a person dies, leaving their spouse behind, the homestead exemption ensures that they have shelter. They can also protect homes from property tax. But homestead protection can also safeguard a house from being taken over and sold by a creditor.
Without homestead exemption laws, creditors could force you to sell your house. Although you may have to sell off some of your property to repay your debts, your house should always be protected. For obvious reasons, the effects of forcibly losing your house can be profoundly negative. The threat of homelessness itself is enough to justify laws protecting homes from forces sale, but loss of a house can cause irreparable damage in personal relationships.
On the other hand, homestead exemptions do not protect additional homes. If you have more than one house or similar property, you may only be able to keep one of them as your primary residence. Selling the other house can go a long way toward debt relief, given the value of real estate, so the loss may not be so bad in the long run. Given that most people are not fortunate enough to own two houses, the sale might provide another person with a house they need.
Filing for bankruptcy does require changing your spending habits and may involve losing some of your property. What many people do not realize, however, is that much of their property can be kept safe during bankruptcy. Essentials and work-related property can be kept exempt. To a limited extent, even electronics like TVs and computers can be entirely protected from creditors.
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To learn more about bankruptcy and how you can minimize its impact on your life, contact the experienced Boston bankruptcy lawyers of Joshua Spirn & Associates at 800-975-5346 today to speak directly with a lawyer.