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    Homestead Question

    From what I have understood previously, one must rely on the "trustee" to pay the exemptions as a matter of distribution of the estate. Does that sound correct?

    Also it sounds like, based on CA homestead law, that if you file your Homestead Declaration with the county recorder, and your home is forced into sale, that escrow would be required to distribute the exempted amount directly to the debtor. Can anyone clarify this or Does anyone have any opinions?

    Thanks

    #2
    IF the Trustee were to seize and sell your house, you would be paid your Homestead Exemption amount. Provided, the sale price cleared the mortgage owed, and normal costs to sell.

    Registering a Homestead Exemption only protects your equity against Judgements, Liens, and in the event you file, may be necessary prior to BK.

    Registering a Homestead Exemption does not guarantee you'll be paid a penny if the house goes to sale. If the Lender forecloses, for example, the Lender gets paid first. That's the mortgage, penalties, interest, fees, and legal costs for the sale. Then you'd get any proceeds left over, if any.

    Just an example for you,............ We had a $190K mortgage. In 5 months of no payments, the Lender ran up $8K in penalties, lates, interest, fees, and Foreclosure legal costs. Money we had to pay when we actually sold the property ourselves.
    Filed Ch 7 - 09/06
    Discharged - 12/2006
    Officially Declared No Asset - 03/2007
    Closed - 04/2007

    I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

    Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

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