What is a homestead exemption?
A homestead exemption is a legal protection that can be claimed by a property owner in Oregon to protect their primary residence from creditors. It stops creditors from forcing the sale of the owner’s home in order to pay off debt. The exemption applies to all debts, except federal tax liens, if the house is used as the primary residence. In Oregon, the homestead exemption is based off of the value of the property. The amount of homestead exemption is generally equal to $40,000 of the property’s assessed value or the owner’s equity in the house, whichever is lower. So if a property is worth $100,000 and the owner has an equity of $30,000, the exemption would be equal to $30,000. In Oregon, if a family loses their primary residence in a bankruptcy, the home can be kept free of creditors if the exemption is claimed and if the homestead exemption is greater than the amount of debt that the family owes. As long as the family continues to live in the home, they’ll keep their homestead exemption even if they owe more than the allowed amount or if their house increases in value. This protection provided by the homestead exemption makes it easier for people to own a home and keep it safe from creditors.
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