Homestead laws allow homeowners to declare a limited portion of their property as a "homestead," thus sparing it from creditors in the event of a bankruptcy or other financial hardship. Originally intended to protect families from losing their farms, homestead laws now apply to homes, condos and residential cooperatives. Nevada's homestead law calls for an automatic exemption that protects equity in a home up to $550,000.
Nevada Homestead Law: What's Protected?
When you record a Declaration of Homestead, Nevada law protects the equity in your home up to $550,000 from general creditor claims (unpaid medical bills, bankruptcy, charge card debts, business/personal loans, accidents) but would not preclude a seizure or forced sale of your residence from general creditors if your equity exceeds the $550,000.
A creditor may file suit and can record a judgment lien against any real property you own. Recording a Declaration of Homestead protects your principal residence up to the statutory maximum. For example, if the value of your home is $645,000 and you have a first mortgage of $485,000 plus a second mortgage of $10,000, the equity is $150,000.The Homestead law does not protect you against debts secured by a mortgage or deed of trust, payment of taxes, IRS lien, mechanic's lien, child support or alimony payments.
Purpose of Homestead Laws
A bankruptcy proceeding will generally require a person to sell all of their assets in order to pay for their debts. One main purpose of homestead laws is to prevent homelessness in the event of bankruptcy. A person who goes through bankruptcy will always have fewer assets than they have liabilities.
|Max. Property Value That May Be Designated 'Homestead'||$5500,000|
|Maximum Acreage (Urban)||-|
|Maximum Acreage (Rural)||-|
Note: State laws are constantly changing -- contact a Nevada attorney or conduct your own legal research to verify the state law(s) you are researching.
Contact a qualified attorney.