Homestead Act provides homeowners with some very powerful protections. Specifically, if you own real estate that you use as your primary residence. You really want to make sure that you have a proper declaration of homestead on record at the Registry of Deeds.
It’s easy to do you don’t need an attorney for that you can actually go to the Registry of Deeds to check the records, If you don’t have one, the staff there will help you put one on right then and there it’s a one-page form but the simplicity of that form again gives you tremendous protection as a homeowner.
What the homestead does is, it essentially prevents your involuntary creditors from taking your house away from you. What it means is by that is if you happen to fallen behind on some credit card debts or you got sued for some other matter and your creditor put a lien on your house if you have a homestead it essentially acts as a shield to prevent your creditors from being able to take that house away from you.
Now there’s an obvious exception and that’s your mortgage if you don’t pay your mortgage your creditor meaning the bank will be able to foreclose and take the house away from you simply put nobody gets a free house but it does stop your other creditors from being able to take away your home.
There’s another big benefit of the Homestead Act and that’s in bankruptcy if you end up with a lot of debts and make the decision that you need to file bankruptcy the homestead. In most cases, will let you keep your house and the equity that’s in that house up to about $500,000.
For a vast majority of people looking at bankruptcy that is more than enough protection to let them keep their home.
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