Massachusetts Homestead Act
The Massachusetts Homestead Act provides valuable protections for homeowners against certain claims from creditors. With the passage of the “Affordable Homes Act” on August 6, 2024, these protections were significantly enhanced, doubling the declared homestead exemptions. Below, we explore key aspects of the Homestead Act and answer common questions about what it does and does not protect.
What is the Homestead Act and How Does It Protect You from Creditors in Massachusetts?
The Massachusetts Homestead Act (MGL c. 188) is designed to protect the equity in your primary residence from being claimed by unsecured creditors. With the recent changes under the “Affordable Homes Act,” homeowners who have filed a *declared homestead* can now shield up to $1,000,000 of home equity from creditors. For elderly (age 62 or older) and disabled homeowners, the protection is even greater: eligible homeowners can “stack” their exemptions, safeguarding up to $2,000,000 in equity.
This protection applies to unsecured debts, meaning that creditors cannot force the sale of your home to recover these types of debts if you have filed a homestead declaration. However, it is essential to understand what this act does not cover.
What is the Elderly Homestead Exemption in Massachusetts?
The *elderly homestead exemption* allows homeowners who are age 62 or older to further protect the equity in their principal residence. By filing a homestead declaration and meeting the age requirement, elderly homeowners can “stack” their exemptions with other qualifying residents, effectively doubling the equity protection to $2,000,000. This provision also applies to disabled homeowners who meet specific disability criteria.
This expanded exemption offers significant peace of mind, ensuring that a substantial amount of home equity remains secure in the event of financial difficulties.
What is Not Protected by a Declared Homestead?
While the Massachusetts Homestead Act provides robust protections, it does not shield against all claims. The following types of debts and obligations are *not* covered by a declared homestead:
- Secured Debts: Mortgages, home equity loans, and property tax liens. If you default on your mortgage or property taxes, the lender or the government can still foreclose on your property.
- Spousal or Child Support Obligations: Court-ordered payments related to divorce or family support are not protected under the homestead declaration.
- Liens for Work Done on the Property: Mechanic’s or contractor’s liens resulting from work or improvements on the home are not exempt.
- Certain State or Federal Liens: Examples include IRS tax liens or state tax obligations that override the homestead protection.
Can a Lien Be Placed on a Homestead Property in Massachusetts?
Yes, a lien can be placed on a homestead property in certain situations. For instance, if you owe money for unpaid taxes, a creditor like the IRS or the Massachusetts Department of Revenue can place a lien on your home, even if you have filed a homestead declaration. Similarly, if a creditor wins a lawsuit against you and secures a judgment lien, they can place it on your property. However, the Homestead Act ensures that your home cannot be forcibly sold to satisfy *unsecured* judgment debts up to the protected amount.
It is important to seek legal guidance if you are concerned about potential liens or creditor claims affecting your homestead protection.
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