State Homestead Laws

The federal Homestead Act, which was enacted in 1862, offered free 160-acre parcels of land to anyone willing to settle on them. After five years, these "homesteaders" would become the owners of the land, as long as certain conditions were met (such as building a house and living on the property). Though this act was repealed in 1976, many states have enacted their own homestead laws. If your state has one, it may protect some or all of the equity in your home against certain creditor claims.

Caution: A homestead filing will protect your home from most debts (including judgments) that arise after the homestead becomes effective. It generally will not protect a home from debts incurred before the homestead status attaches.

Caution: While the homestead laws in some states may substantially protect your residence from unsecured creditor claims, even through a bankruptcy filing, this is not always the case. You should consult an attorney about the protection offered by your state's homestead laws and other asset protection strategies.

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