Sandra owns a home in Quincy, Massachusetts worth $600,000. She has an automatic homestead protection in place but has NOT filed a Declaration of Homestead. A creditor obtains a $200,000 unsecured judgment against Sandra. How much of Sandra's home equity is protected from this unsecured creditor under Massachusetts law?
Correct Answer
B) $125,000, because the automatic homestead protection applies by operation of law without recording
Under MGL Chapter 188, Massachusetts has a two-tier homestead system. An automatic homestead of $125,000 exists by operation of law for all owner-occupied primary residences, without any recording requirement. Sandra does not need to file a Declaration of Homestead to receive this basic protection. Therefore, $125,000 of her home equity is protected from the unsecured creditor's $200,000 judgment. To obtain the full $500,000 protection, she would need to record a notarized Declaration of Homestead at the Registry of Deeds.
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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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