Homestead Protection for the Elderly and Disabled

The Homestead Act protects property from collection actions that might otherwise force the sale of a home to pay an outstanding debt. In 1990 the Legislature increased protection available under the Homestead Act to mobile homes. In addition, now homeowners are eligible at 62 for the higher elders' protection.

WHEN IS THE HOMESTEAD ACT HELPFUL?

Under the right circumstances this law keeps a creditor from placing an attachment on a homeowner's property. Ordinarily, if a person owes money and does not pay it, the creditor can go to court to begin a lawsuit to force the debtor to pay. At the same time the creditor can "attach" any property the debtor owns. The attached property cannot be sold until the lawsuit is over. After the court decides that the debtor really does owe the creditor money, the creditor can "levy on the execution" or force the sale of the property to pay the debt. If the debtor has protection under the Homestead Act, then his or her home is safeguarded from attachment or forced sale.

HOW MUCH PROTECTION DO I GET?

The Homestead Act will not protect you from those creditors to whom you owe:

1.      Debts incurred before filing a Homestead form

2.      Local, state, and federal taxes

3.      Court ordered support payments

4.      First or second mortgages

In addition, the Act only protects up to a certain dollar amount of the equity the homeowner has in the property. For persons over 62 and disabled persons, $200,000 is the amount protected. For others it is $100,000. Each owner is given that dollar amount of protection, so an elderly couple can receive $400,000 of protection. If your home is more valuable than the protected amount, then a creditor can force the sale of the property, but cannot touch the protected amount. For example, an elderly woman owns a home worth $250,000 and has debts of $100,000. If she cannot pay them, the house will be sold and she will be allowed to keep $200,000. The creditor, to whom she owes $100,000, will only get $50,000 from the sale. If you are in this situation, consult an attorney to be sure that you receive all the protection you can.

HOW CAN I GET PROTECTION UNDER THE HOMESTEAD ACT?

You are only protected if you file a form either at the Registry of Deeds or at your town hall. Only debts incurred after the filing are affected. If you find yourself in debt and unable to pay, then it is too late to protect yourself with a Homestead Act filing. For this reason, it is better to file sooner than later, before you can predict that you will run into trouble.

If your home is real estate, then you can usually file a form at the Registry of Deeds for your county. The form states that this particular property is your principal residence and that you claim the protection of the Homestead Act. You will have to include the description of the property and the book and page numbers from your deed. This filing notifies anyone deciding whether to lend you money that he will not be able to collect the debt from the forced sale of your home.

Some owners, however, must file in the Land Court instead of the Registry of Deeds. In Massachusetts property ownership is kept track of in two ways. The more old fashioned and popular method is to "record" transactions one by one at the Registry of Deeds. If you want to know who owns a piece of property you have to look through a long series of books trying to find deeds, mortgages, liens, etc. Each of these is filed in a different book depending on the date of the document. A title search can be a long and tiresome process. Alternatively, your property can be "registered" at the Land Court. This means that every transaction about a single piece of property is written down on a single piece of paper, eliminating the need for a long search. This is a little more expensive, but it is easier to track.

If you wish to file a Homestead Act form you must do so wherever your deed is, either in the Registry of Deeds or in the Land Court. If you know your property is registered, send the original of your owner's duplicate certificate, the form, and $20 to the Land Court. If you do not know, you can send the form and $10 to the Registry of Deeds. That will probably take care of the matter. If, however, your land is registered in the Land Court, the Registry will send your form and check back to you, explaining what you should do next.

If your residence is a mobile home you can file a statement at your city or town hall. The document should say the mobile home is the owner's principal place of residence. You should swear that the statement is true and sign it. Your town hall may have forms.