Thomas owns a home in Fort Smith, Arkansas valued at $320,000. He has a $180,000 deed of trust loan on the property. He also has a $15,000 judgment lien against him from a business dispute. His property is his primary residence and is located in a city. Under the Arkansas homestead exemption, what is the maximum acreage that can be protected, and can the judgment creditor force a sale of Thomas's home?
Correct Answer
A) Up to 1/4 acre is protected; the judgment creditor cannot force a sale of the properly designated urban homestead
Under Ark. Const. Art. 9, §§ 3-6, the urban homestead exemption protects up to 1/4 acre in a city or town. Thomas's property is in Fort Smith (an urban area), so the 1/4-acre urban limit applies. Critically, Arkansas's homestead exemption places no cap on the value of the protected homestead — only the acreage is limited. Therefore, even though the home is worth $320,000, the judgment creditor cannot force a sale of Thomas's properly designated primary residence homestead based on the judgment lien alone.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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