Sandra owns a home in Casper, Wyoming with $85,000 in equity. She has no mortgage. A contractor wins a civil judgment against her for $30,000. Sandra is concerned about losing her home to satisfy the judgment. Which statement accurately describes the protection Wyoming law provides her?
Correct Answer
C) Sandra's homestead exemption protects $20,000 of her equity from the unsecured judgment creditor.
Wyoming's homestead exemption protects $20,000 of equity in a primary residence from unsecured creditors, including civil judgment liens. Since the contractor's $30,000 judgment is an unsecured creditor claim, Sandra's first $20,000 of equity is shielded. However, the remaining $65,000 in equity above the exemption amount could potentially be reached by the creditor. The exemption must be properly claimed.
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Related Topics & Key Terms
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Related Concepts
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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.
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