Kevin owns a home in Springfield, Massachusetts as his primary residence. He has not recorded any documents with the Registry of Deeds related to homestead protection. Kevin defaults on a personal credit card debt of $90,000, and the credit card company obtains a judgment against him. How much equity in Kevin's home is protected from this unsecured judgment creditor under Massachusetts law?
Correct Answer
A) Up to $125,000 of equity is protected under the automatic homestead provision
Under MGL Chapter 188, Massachusetts provides a two-tier homestead system. An automatic homestead of $125,000 applies by operation of law to any owner-occupied primary residence, regardless of whether a Declaration of Homestead has been recorded. Kevin does not need to have filed any documents to receive this baseline protection. The $125,000 automatic homestead protects that amount of equity from unsecured creditor claims such as credit card judgments.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
A leasehold estate grants the right to possess and use property for a defined period of time, without conferring ownership.
A life estate is a freehold estate that grants ownership rights for the duration of someone's life.
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