BY SIMPLY FILING FOR AN EXEMPTION, YOU CAN SAFEGUARD
UP TO $300,000 IN HOME EQUITY.
By DOLORES KONG
The Boston Globe
As an attorney in Brockton, Robert S. Creedon Jr. saw
clients risk losing their homes to creditors because
they failed to take advantage of a little-known but
easy-to-get homestead exemption.
Now, as a state senator, he has just helped increase
the exemption amount for homeowners for the first time
in more than a decade, allowing them to protect up to
$300,000 of home equity from certain creditors. The
previous limit for homeowners under the age of 62 was
$100,000; for those 62 and older or disabled, it was
"We haven't recognized in the past that property
values have gone up," says Creedon, a Brockton
Democrat who co-sponsored the bill to increase the
amount with three other legislators, including his
wife, state Representative Geraldine M. Creedon. The
new limit, in effect as of November 2, "covers in
excess of 90 percent of homes in the Commonwealth," he
But this increased amount doesn't do homeowners any
good unless they actually file for the exemption.
That can be easily done by filling out a standard form
available at the local county registry of deeds and
paying a small fee, $10 for recorded land and $30 for
registered land, or by hiring a real estate or estate
The exemption protects a homeowner from losing a
primary residence as a result of certain unpaid debts.
That does not include failing to pay taxes, any debt
incurred before filing for a homestead exemption, a
mortgage, or court-ordered child support or alimony.
The homestead exemption also does not apply to
Most people who filed for an exemption under the old
limit automatically come under the new limit, as a
result of a request made by Governor Paul Cellucci
before he signed the bill into law. But people who
have refinanced or taken out a home equity loan since
taking out the exemption under the old limit may need
to refile in order to qualify for the new limit.
The homestead exemption was first put on the books in
the mid- 1800s to "protect the wife and minor children
if something happens to the husband," according to
John Curran, an attorney and technical assistant at
the Norfolk County Registry of Deeds, which makes
homestead exemption forms and information available to
Curran, a homeowner, has filed for a homestead
exemption several times himself since the 1980s,
specifically after refinancing or taking out a home
equity loan. "The most recent time was this year,
after I took out an equity loan," he says.
While the homestead exemption is easy to claim - if
you know about it - the situation gets a little more
complicated for those who refinance or get an equity
loan, add a new owner to the deed, or make other
Because mortgage lenders usually require the lifting
of a previously filed homestead exemption before
approving a refinance, for instance, "you might need
to do it again after refinancing," says Harry S.
Margolis, a partner with Margolis & Cohen, LLP, a
Boston- based law firm that specializes in elder law
and estate planning.
And even though the new law raises the exemption
amount to the same $300,000 no matter what the
homeowner's age, Margolis's firm recommends that
couples who own a home jointly refile after they reach
their 62d birthdays.
That's because the law allows only one homestead
declaration for co-owners under the age of 62,
protecting up to $300,000 in home equity, but two
homestead declarations for co-owners who are 62 and
older or disabled, protecting up to $600,000,
according to the law firm's newsletter, Massachusetts
Luckily, most homeowners won't need to make use of the
homestead exemption, Margolis says, "but it's
something you ought to do," especially since it
doesn't cost much.
Some attempts have been made to make the homestead
exemption automatic in Massachusetts, as it is in
Florida, so that homeowners don't need to worry about
having to file a form every time they refinance or
make other changes. But those attempts have been
unsuccessful so far. State Senator Cheryl A. Jacques,
a Needham Democrat, vows to refile by December 6 - in
time for the next legislative session - a bill to make
the exemption automatic.
"I fundamentally believe that everyone is entitled to
this protection, but currently only those with smart
lawyers are taking advantage of that protection," says
Jacques. "No matter how much people get into financial
hot water, their home should be secure."
Jacques, who supported Creedon's bill, says, "Now that
we've raised the amount, let's make it automatic for
Some attorneys representing creditors have objected to
the automatic exemption, as well as to the increased
It took the four years since he was elected state
senator for Creedon to see his legislation to increase
the exemption amount finally passed.
"It's one of the most inexpensive pieces of consumer
protection that exists, protecting up to $300,000 in
equity in your most valued asset," he says. "It's a
very positive thing for homeowners."