22. May 2012 14:07
The primary purpose of the California's homestead law is to protect a person or family’s residence from certain types of creditors. It allows debtors and their families to remain in the home in some situations even when a sale of the home could pay off the creditors. Generally, a homestead is protected from forced sale by certain creditors, to the extent of the homestead exemption, which is the amount of equity that is protected by law. A judgment creditor cannot force the sale of a home unless they first show the court that before they are paid, (1) the homeowner will receive their homestead exemption and (2) that any and all prior liens will be paid. This legal article will discuss the two types of homesteads, the Residential (or automatic) homestead and the declared homestead and other issues related to homesteads.
California homestead law provides some protections for homeowners against certain judgment creditors trying to force the sale of the home or attach sale proceeds. The statute provide for two types of protections in the form of exemptions: the residential homestead exemption and the declared homestead. The residential homestead exemption does not require the recording of any document and the homeowner qualifies for the exemption based on residency. The declared homestead requires the recording of a homestead declaration and provides additional protections as compared to the residential exemption.