As home values in Orange County have skyrocketed, concerns about protecting the home in bankruptcy have increased. There is the mistaken impression that filing for bankruptcy will always result in your home being sold. In the majority of bankruptcy cases the home is a protected asset and will not be sold?
What is the Amount That You Can Protect in Your Orange County Home?
As of January 1, 2021 the homestead amount is now based on the median single family sales price for the prior year. The new law allows a maximum homestead of $600,000 and a minimum of $300,ooo. In Orange County the median sales price for single family homes was over $600,000 in 2020, therefore Orange County home owners would get the maximum allowable of $600,000.
What Determines Whether Your Home In Orange County is Protected?
The three main factors that need to be examined are:
- Value of Home
- Balance Owed on Home
- When Home Was Acquired
In order to determine whether your Orange County home is protected in a Chapter 7 bankruptcy we must first determine the value of your home. There are several different methods that can be used to determine the value of your home. The most accurate would be to either obtain a broker pricing opinion or an appraisal. Once the value of your home is determined we deduct out your current mortgage balance to determine the equity amount in your home.
If your home was acquired within the last 1215 days from the date you file your bankruptcy then the amount that you can claim on the homestead is limited to $170,350.
There are a lot of other important factors that may limit the use of the homestead exemption. Consulting with a bankruptcy attorney can help you determine whether your home can be protected in a Chapter 7 bankruptcy. For a free consultation call us at tel: 714-872-8187.
For more information on the new homestead law go to: Huge Increase in California Homestead Exemption.