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California Homestead  

Protecting the equity in your home
Last Updated: May 31, 2016 URL: http://calcountylawlib.libguides.com/content.php?pid=651213 Print Guide RSS UpdatesEmail Alerts

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Protect Your Homestead

 

What Is a Homestead?

California  Code of Civil Procedure Section 704.710 defines a homestead as:

"the principal dwelling (1) in which the judgment debtor or the judgment debtor's spouse resided on the date the judgment creditor's lien attached to the dwelling, and (2) in which the judgment debtor or the judgment debtor's spouse resided continuously thereafter until the date of the court determination that the dwelling is a homestead. Where exempt proceeds from the sale or damage or destruction of a homestead are used toward the acquisition of a dwelling within the six-month period provided by Section 704.720, "homestead" also means the dwelling so acquired if it is the principal dwelling in which the judgment debtor or the judgment debtor's spouse resided continuously from the date of acquisition until the date of the court determination that the dwelling is a homestead, whether or not an abstract or certified copy of a judgment was recorded to create a judgment lien before the dwelling was acquired."

 

What is a Homestead Exemption?

A homestead exemption is a method for homeowners to protect a certain amount of equity in their home. The amount protected varies depending on a number of factors.

A homestead exemption does not prevent a forced sale of the property. But it does ensure the the homeowner will receive the amount of the exemption before any creditors are paid from the proceeds of the sale. 

Funds in the exemption can be protected from debt collection for a period of time and can be used to buy another residence.

 

How Much Equity is Protected?

The amount of exemption varies, depending on the owner's age, marital status, income, and disability. See CCP 704.720.

Basically, the exemptions are:

(1) $75,000 unless the debtor or their spouse who resides in the property is a person described in (2) or (3);

(2) $100,000 if the debtor or spouse is a member of a family unit, if a least one member of the family unit owns no interest in the homestead, or hs only community property interest in the homestead with the debtor;

(3) $175,000 if the debtor who resides in the homestead is at the time of the sale either (a) a person 65 year or older, (b) a person physically or mentally disabled and as a result of that disability unable to engage in substantial gainful employment, or (c) a person 55 years or older with a gross annual income less than $15,000, or, if the debtor is married, a gross annual income, including that of the spouse, of not more than $20,000 and the sale is involuntary.

 

How Do I File a Homestead Declaration?

First of all, research the impact of a Homestead Declaration and make sure it's right for you.

Then fill out the appropriate Homestead of Declaration form, have it notarized, and file it with the County Recorder of the county in which the property is located. In San Diego County it is here.

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Can I Abandon a Homestead?

Yes.

You can record an Abandonment of Homestead with the County Recorder. This is called an Abandonment by Declaration.

Or, a homestead is deemed abandoned by operation of law if another homestead is executed or recorded on a different property, or when the debtor establishes another dwelling as his/her personal residence.  You cannot have two homesteads at the same time.

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