Massachusetts Homestead protection is provided to Melrose MA homeowners and protects a home from unsecured creditors. This is a vital law for any property owner. The Massachusetts homestead protection act overview in this blog includes the most important components of this law.
Why Homeowners Need This Protection
Homeowners gain equity in a property gradually. This equity may be limited initially, but will increase to a larger value over time. There are scenarios where creditors or other parties will go after that dollar value to fulfill a financial obligation of an individual. Protecting it may be critical.
If you are in a car accident and the other party sues you and wins, and the award they are granted is more than what your car insurance provides in coverage. Your assets, such as your property, may be levied to fulfill your financial obligation. This is just one of many possible scenarios where homestead protection could save you from losing equity.
Melrose MA Homestead Protection Act Overview
Under Massachusetts General Laws, Chapter 188, which is known as the Massachusetts Homestead Protection Act, homeowners receive an automatic protection of one-hundred and twenty-five thousand dollars (125,000) without filing any paperwork. A Declaration of Homestead may be filed at the local registry of deeds in your county of primary residence to increase the protection up to five hundred thousand dollars (500,000). The filing involves a specific form and payment of a fee, which varies for each county but is normally less than one-hundred (100) dollars. If you are buying a new home, details will be provided to you by the closing attorney.
Homestead protection strictly applies to a primary residence. There are special provisions for individuals over the age of sixty-two (62) and disabled individuals. The Homestead Law will not protect against all creditors or scenarios. Certain exceptions apply, such as municipal tax levies, home mortgages, and probate court judgements, just to mention a few. For comprehensive details on this law, visit the Secretary of State website. The details in this article are provided as an introduction based on the resources available at the given time. It is subject to change without notice (as alterations may take place to the Homestead law). Always visit the website link above for current facts.