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Homestead Declarations

A homestead declaration is a legal document that can protect up to $500,000 in value of a home against claims by most creditors. For example, if you were to become severely ill and incurred hundreds of thousands of dollars in medical bills, up to $500,000 in value of your home would be protected.

The Homestead Act

The Massachusetts Homestead Act is a law created to protect homeowners in Massachusetts from having their homes attached, secured or sold to pay off unsecured debts, such as credit card debt or claims from a lawsuit. The Act was amended in March of 2011 to automatically protect up to $125,000 of an eligible homeowner’s equity in the home. That is, you do not have to file a Declaration of Homestead to be protected for up to $125,000. However, to receive up to $500,000 equity protection, you must file a homestead declaration.

Who is eligible?

To qualify for Massachusetts Homestead Act protection, you must own a home in Massachusetts. You can be the sole owner, a joint owner, or the beneficiary of a trust. The home can be a single-family home, 2-4-unit multi-family home, condominium unit, mobile home, manufactured home, or cooperative housing unit. The home must serve as your primary residence and you must reside there. If you own more than one home, homestead protection applies only to the one that serves as your primary residence.

If you sell your home, proceeds from the sale are protected until you buy a new house, or for one year, whichever comes first. If your home is damaged and an insurance company pays your claim, proceeds from the claim are protected for two years, or until repairs to the home have been completed (or you purchase a new one), whichever comes first.

What types of debt does the Homestead Act not offer protection against?

The protection offered by the Homestead Act and a Declaration of Homestead applies to all debts except:

  • Federal, state, and local taxes
  • Liens on the property that existed before the homestead protection went into effect
  • Mortgages on the home
  • Court orders for child support or spousal support
  • Attachments to land not owned by the owner of the homestead
  • Court-ordered judgments based on “fraud, mistake, duress, undue influence or lack of capacity”

It is important to note that homestead protection does not apply if you enter a nursing home and Medicaid pays for your stay.

To learn more about the benefits of homestead declarations, and experienced legal assistance with filing your claim, contact the Law Office of Alexis B. Levitt for a consultation.