California Homesteading Laws: Protection & Requirements

The term "homesteading" is often erroneously applied to the legal process of declaring in a written statement made under oath that a particular home or property is identified and claimed as an individual or family's principal place of residence. Homestead protection laws exist in many states to protect homeowners, and special considerations exist for homeowners in California.

Homestead Protection Laws

Homestead protection laws protect homeowners against creditors forcibly selling their homes. Normally, if a homeowner owes a significant amount of unsecured debt and is unable to pay, a creditor can obtain a judgment to force the sale of a debtor's assets, including a home in order to collect payment.

Exemption Levels

A homestead exemption does not protect the total amount of a homeowner's equity, but it does protect up to a certain amount depending on a homeowner's situation. The amount of the homestead exemption can vary according to state and it may change from time to time. In the state of California, the initial amount of the homestead exemption is $50,000 for a single person. The total amount of exemption increases to $75,000 for a married couple and $150,000 for a disabled person, individuals over age 65 or those over the age of 55 who have a gross income of $15,000 or less per year per individual and $20,000 per married couple.

Obtaining Homestead

Homestead protection is automatic in California for all homeowners. Automatic exemption is applied at the minimum level of $50,000 for any individual who owns property. Even if the sale of a home is forced for non-payment of unsecured debts, a homeowner is guaranteed protection for up to $50,000 of a home's equity. If a home is sold for its full value with a profit of $100,000, the homeowner is allowed to keep at least $50,000 and the remainder will go to paying off the unsecured debts.

Filing Homestead

To obtain further homestead protection of $75,000 or $150,000 up to the available maximums, a homeowner is required to file his homestead with the county recorder's office. Homestead filing companies provide this service for a fee, or a homeowner can request the proper homestead application forms and file the paperwork independently.

Filing Accuracy

A homestead application that is filed improperly might fail to protect a homeowner in the event of an involuntary sale. Legal assistance is easy to find and will help ensure the homestead is filed correctly and shows the name of owner, a statement declaring the homestead, a description of the property and signatures with a notary seal.