Homestead laws allow homeowners (and other property owners) to declare a portion of their real property as a "homestead" that cannot be taken by creditors. These laws are intended to prevent homelessness that may result from tough economic conditions, such as a foreclosure. Georgia homestead laws allow creditors to exempt up to $10,000 worth of their home under certain conditions. For example, if your house is worth $100,000 and you owe $90,000 on your mortgage, you have $10,000 of equity in your home, and that equity cannot be taken by creditors.
Learn more about Georgia homestead laws in brief via the table or read more in the article below. See Bankruptcy Exemptions: Chapter 7 for additional details.
|Max. Property Value That May Be Designated 'Homestead'||$10,000|
|Maximum Acreage (Urban)||-|
|Maximum Acreage (Rural)||-|
Purpose of Homestead Laws
Issues surrounding homestead are common in a forclosure or other forced sale. Foreclosure is the legal right of a mortgage holder to get ownership of a mortgaged property when the mortgagor does not adhere to certain parts of a mortgage agreement. When the mortagee is a bank, they are usually not interested in owning the property, but would rather sell the home to someone else. If the bank does this, the former homeowner will likely be without a home. Depending on the reason for the foreclosure, the former homeowner may not get any of the proceeds of the home, regardless of how much they had invested in their home. In order to prevent homelessnes and loss of all equity in a home, the former homeowner may keep some of the value of their home to keep them on their feet. This is the homestead.
What Homestead Applies to in Georgia
Each state has different rules about which types of properties are eligible for homestead. Some states may allow mobile homes and condominums to be eligible for homestead, while others may require that the home and land be used by the person claiming homestead. In Georgia, homestead applies to real or personal property used as a residence, including a condominum or co-op. It does not apply to land owned that is not used as a residence.
When Homestead Applies
Homestead claims are common in bankruptcy proceedings. Bankruptcy is usually the last step for a person in severe debt, and the debtor will likely be forced to sell their home in order to pay their creditors for their debts. However, a debtor may want to sell a home in order to pay debts before bankruptcy is an issue. Homestead still applies in this case.
If you would like to know more about homestead in Georgia, there are many bankruptcy attorneys in your area who may be able to help.
Contact a qualified attorney.