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In the United States, a declaration of homestead is a legal document declaring that a home is the principal residence of the filer and family, protecting it from seizure to satisfy unsecured debts. This document must be filed with the registry of deeds where the deed information pertaining to the property is recorded and need be filed only by one of the owners to protect the residence; a wife, for example, can file on behalf of her entire family, not just herself. It is important to note that a declaration of homestead will not offer blanket protection for all debts, only certain kinds of debt.
If a home is used as collateral on a secured loan, the lender can seize the home for nonpayment. Likewise with situations where people do not pay taxes and tax agencies seize their properties for nonpayment. A declaration of homestead can also be overturned by a court in a capacity hearing and will not protect a home from debt collection related to debts incurred before the purchase of the home.
A form is usually available to file a declaration of homestead or people can have an original drafted by an attorney. The form attests to the fact that the home is a primary place of residence and will note the other people who reside in the home. Once appropriately witnessed and filed, the form provides protection, alerting creditors to the fact that they cannot take the home except in special circumstances.
People struggling with debts may find assistance through an attorney or debt counselor. Filing a declaration of homestead is one step people can take to protect themselves while they negotiate over debts to work out a payment plan, request debt forgiveness, and take other steps to resolve the issue. Attorneys can provide advice about specific situations on the basis of the type of debts incurred and the agencies or organizations involved.
In cases where homestead protections are received under fraudulent circumstances, as when people file a declaration of homestead for a property that is not their primary residence, there can be legal penalties. The protection will be revoked as it does not apply in that situation and the home may be seized. People who are not sure about whether a property qualifies for protection can consult an attorney to see if they can file or if they can make adjustments to the way they use the property in order to qualify for protections. People cannot have more than one property protected with such a declaration.
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