Homestead Declaration for Single Person
A homestead declaration is a legal document that claims and registers a particular house as the owners homestead. When the document is signed by the owner and recorded in the county where the house is located, it helps to protect the house against loss to creditors. For instance, if a homeowner files a petition in bankruptcy, it may be possible, because of the declared homestead, to retain the family home, or at least a portion of the equity in the property, instead of losing it to creditors.
Similar protections of the home or equity are also enjoyed by homeowners who have not recorded a homestead declaration. This protection is sometimes called an automatic homestead. However, those protections are not as extensive as those provided by a properly written and recorded homestead declaration.
The advantages of filing a declared homestead over relying on the automatic homestead include:
The owner who files a declared homestead can choose which of several different residences to protect.
The protection provided by a declared homestead will continue to apply to that residence even if the owner moves.
The protection that is provided by a declared homestead will apply to the proceeds of a voluntary sale.
The proceeds of a voluntary sale will be protected after they are used to purchase another house because the protection given to the first house will carry over to the second.
Neither the automatic homestead nor the declared homestead will protect a homeowner against the loss of his or her home to a secured creditor such as a lender who financed the original purchase, a lender who extended a second mortgage loan, or a contractor, subcontractor or laborer who has filed a valid mechanic's lien.
