A homestead generally refers to a judgment debtor’s principal dwelling. The California Constitution protects a portion of the equity in the homestead or dwelling from a forced sale. That protection is called a homestead exemption.
In California, there are two types of homestead exemptions – automatic and declared. The automatic exemption protects the equity of the debtor in a dwelling in which the debtor resides at the time the judgment is enforced, up to a statutory amount that is dependent on family or marital status, disability, and age of the debtor. This protection is automatic – aside from residing in the dwelling at the relevant time, the debtor does not need to take any specific action to claim this protection.
The declared homestead is similar to an automatic homestead. However, to trigger the protections afforded by a declared homestead, the debtor is required to record a valid declaration of homestead before the judgment is enforced. In some cases, the declared homestead exemption may provide broader protection from judgment enforcement activity than an automatic exemption. For example, the declared homestead provides protection upon the forced sale of the homestead by a creditor, and it also applies upon a voluntary sale by the homestead owner. In contrast, the automatic exemption only applies to a forced sale of the property, it does not apply when there is a voluntary sale of the property by the owner.
Despite their differences, the amount of the declared homestead and the automatic homestead are the same because they are established under the same statute. The statutory amount is based on the status of the person asserting the benefit of the exemption at the time of the attempted involuntary sale of the property.
Currently, the minimum dwelling exemption is $75,000. The exemption is increased to $100,000 if: (1) the judgment debtor or the debtors spouse who resides in the homestead is, at the time of the attempted sale, a member of a family unit; and (2) at least one member of the family unit: (a) owns no interest in the homestead; or (b) only holds a community property interest in the dwelling with the judgment debtor. The exemption is $175,000 if the judgment debtor or spouse who resides in the homestead at the time of the attempted sale is elderly (minimum age 65), disabled or low income.
Schorr Law has experience with resolving disputes involving homestead exemptions and other judgment enforcement issues related to real property. To see if you qualify for a free 30-minute consultation regarding your matter, please contact us by phone, email, or send us a message through our contact form.