A sudden financial failure can leave a household without the ability to pay for itself. A foreclosure can take a property away and give it back to a lender. However it happens, there is little comfort for homeowners who are faced with the loss of the home.
One of the few protections in the case of foreclosure or other financial loss is homestead laws. These laws often let homeowners set aside a portion of their property as a homestead. This allows them to protect their equity as well as their living space from specific demands by creditors.
Most homeowners can find ways of protecting the balance of a home’s value beyond the note on the mortgage at the time of bankruptcy or other financial issue. Pennsylvania’s homestead allowance is not as high as Florida and other states with similar laws, as only $300 worth of real property can be declared an exemption.
The federal homestead exemption, however, is up to $22,975 for a single person and $45,950 for a married couple. Keeping a home during a bankruptcy proceeding depends on the value of equity and how it is protected from creditors.
Federal law also requires residents to have lived in a homestead for at least 40 months before a bankruptcy filing. An attorney can help answer other questions about homestead laws and related protections.
Homeowners facing real estate seizure under foreclosure may have a case to delay the loss of a home or protect it under bankruptcy. Legal representation can be very helpful in these difficult times with so much at stake.