What is a homestead exemption?

A homestead exemption is a legal right in California that can protect a debtor’s equity in their primary residence from certain creditors. This means that certain creditors are barred from seizing the debtor’s home—even if they have obtained a court judgment or decree. The homestead exemption generally applies to a debtor’s primary residence, or the home in which they live. Typically, the exemption amount is set by the state and can range from just a few thousand dollars to as much as $175,000 for a single-family residence. Homestead exemptions do not apply to second homes, vacation homes, or investment properties. In California, there are two types of homestead exemptions. The first is the state-wide homestead exemption, which exempts up to $75,000 of equity in a debtor’s primary residence from certain creditors. The second type of homestead exemption is the local homestead exemption. This exemption is available in certain counties and cities in California and can provide an even greater protection for debtors. Overall, a homestead exemption is a valuable tool for debtors in California as it can help protect their equity in their primary residence, even if they fall behind on their payments and are subject to certain creditors.

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