AV-10 Application is for property classified and excluded from the tax base under North Carolina General Statute. This can provide asset protection from creditors for at least some of house's value.How to apply for a homestead exemption? To apply for a homestead exemption, you will need to provide documentation that proves you meet the eligibility criteria. Federal law requires that you live in the property for at least 40 months prior to the bankruptcy. In order to claim the homestead exemption in New York, a homeowner must reside in the property as their primary residence.