Robert owns a primary residence in Nashua, New Hampshire with $200,000 in equity. A creditor has obtained a judgment against Robert for an unpaid business debt of $150,000. Under New Hampshire's homestead protection law, how much of Robert's home equity is protected from this creditor's claim?
Correct Answer
C) $120,000, because NH's homestead exemption under RSA 480:1 protects up to that amount
Under RSA 480:1, New Hampshire's homestead exemption protects up to $120,000 of equity in a primary residence from creditor claims. In Robert's case, he has $200,000 in equity, so $120,000 is protected and $80,000 remains exposed to the creditor's $150,000 judgment. It is important to note that NH's homestead exemption protects equity from creditors but does NOT reduce property taxes — a common point of confusion with homestead exemptions in other states.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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