A woman client asked me the following question about homestead protection. Her husband purchased a homestead property prior to their marriage. The house was titled in the husband’s name.
The husband was convicted of a white collar crime and sent to prison. The husband and wife had substantial joint debts, including some civil judgments, which the client could not pay without the husband’s income. The client wanted to know if their creditors could put a lien on their house once the husband was incarcerated and no longer living in his homestead.
Courts have interpreted the constitutional homestead exemption to protect the homestead owner and his family. One of the policies underlying the homestead exemption is ensuring that a debtor’s dependents are not forced out of the family home. Also, a debtor loses homestead protection if he voluntarily abandons the homestead property Courts have stated that criminal incarceration is not a voluntary abandonment of homestead as long as the debtor intends to reoccupy the house at the end of his prison sentence.
I advised the client that I did not think the joint creditors could force the sale of, or place an enforceable lien upon, the homestead while her husband was in prison.
About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.
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