It seems so easy — you buy a home, pay $35 and file a “Declaration of Homestead” to protect it from creditors up to the amounts set by law. But it’s not so simple and it’s actually confusing. While it seems like a no-brainer for any homeowner in Massachusetts, too many people fail to take advantage of this important benefit.
A quick survey of my friends revealed that some had never heard of a homestead declaration, and those that did had only a vague understanding of this rudimentary consumer protection tool. The reason being is that the current law, Chapter 188 §§ 1-10 is ambiguous and unclear at best.
For several years now, the BBA has been working – along with the MBA and REBA – to update the Massachusetts Homestead Exemption. This effort intensified during the BBA presidency of the late M. Ellen Carpenter, a bankruptcy lawyer, and is more important now than ever before.
Quite simply, a declaration of homestead is protection for the equity in your residence from most creditors up to $500,000 in the event you are sued. The Homestead bill that is currently being considered by the legislature, S 2406, will modernize and clarify the existing law. More importantly it will eliminate the requirement that an actual filing be necessary to ensure that a homeowner is protected.
If Homestead reform legislation is enacted, this important protection would be automatic — up to $125,000 for every Massachusetts homeowner. If you’ve filed a Declaration of Homestead that protection would go up to $500,000.
BBA leaders have testified on behalf of homestead legislation reform at numerous public hearings. We continue to press our case with staff and legislators. When legislation to update the homestead statute was taken up in the Senate chamber in late April, it was missing the essential automatic protection provision. Senator Cynthia Creem filed an amendment to restore the automatic provision and the bill was engrossed. It is now in House Ways and Means.
Looking ahead towards the last weeks of formal sessions, the legislature is still working on gambling, economic development, sentencing reform, and the state budget. The BBA will continue to persist in its advocacy efforts.
-Kathleen Joyce
Government Relations Director
Boston Bar Association
