Connecticut's law providing for a homestead exemption protects a person's home from the claim of creditors, subject to certain limitations and exceptions. The homestead exemption protects against creditors attaching the home, forcing a sale to collect an awarded judgment and claims of creditors in a bankruptcy filing.
Homestead Exemption Amount
The homestead exemption protects the equity of the debtor's home that is an eligible homestead property. This is the value of the home less any mortgage balance. The basic amount of equity protected is up to $75,000, with debts related to hospital bills protected up to $125,000. Married couples can double this protection up to $150,000 and $250,000. As long as the debt involved is under the maximum equity protected, the creditor can not force the sale of the debtor's home.
The property must be located in Connecticut and can be a house, condo, manufactured home or mobile home. The person claiming the homestead exemption must a legal owner of the property. The debtor must be physically occupying the home at the time homestead protection is sought. In addition, the home must be the primary residence of the debtor. All three of these personal eligibility requirements must be met. The occupancy and primary residence requirements must be bona fide and in good faith, not just for the purpose of acquiring homestead protection.
Bankruptcy and Foreclosure
The homestead exemption protection can be applied to a bankruptcy filing, if the debtor chooses to use state exemptions rather than federal ones. However, the debtor must use only state bankruptcy exemptions to do so and forgo any eligible federal ones. While the homestead exemption protects against the home's forced sale by a creditor such as a credit card company, it does not provide protection against a foreclosure by a mortgage lender or by the local government to collect unpaid property taxes.
The state law does not require any form to be filed for homestead protection. It is automatic for eligible properties and debtors. The maximum equity amounts are subject to adjustment to reflect inflation. The double amount protected for married couples is applicable only if they own the home jointly and for a joint debt or bankruptcy. Creditors can't seize or sell the homestead property, but they can file a lien against the property. They can execute this if the equity amount falls below the amount of the debt.
- NOLO: The Connecticut Homestead Exemption
- Connecticut General Assembly: Office of Legislative Research Homestead Exemption—Massachusetts and Connecticut Law
- Connecticut General Assembly: Office of Legislative Research Post-Judgment Exemption Law
- Maya Murphy LLC: Connecticut Homestead Exemption Requires Actual Occupation of the Property, Not Merely “Intent to Occupy”
Kerry Zias has been a strategic business consultant and college instructor of business administration courses since 1990. He has taught courses and performed professional consulting work in the areas of marketing, management, business start-ups, entrepreneurship, real estate, sales psychology and performance, business communications, business law and political/governmental relations. Zias holds a Master of Business Administration in marketing from National University.