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I have a homestead declared on my house and the adjacent lot. A collection agency put a lien on the lot. Can they take it?

Becket, MA |

A law firm got a judgement against me on a debt. They put a lien on one of my adjacent lots then sold the account to another law firm who is taking me to court for collection. I have a homestead declaration on both lots (the driveway spans both). The homestead was in place when the lien was allowed. Was that legal? Can they take the lot? If not, what will they try to do next?

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Attorney answers 5

Posted

If title to you for both lots was conveyed to you in one deed, or the lost were conveyed to you separately, but in the exact same name in both deeds, your homestead declaration should protect you. Under the law, currently, every Massachusetts home-owner automatically has a homestead up to the value of $125,000.00 in equity (which is fair market value - any mortgage = equity) in the home, even without recoring a homestead. With a homestead recorded, up to $500,000.00 in equity (see above) is protected. Creditors can obtain and record an execution (a lien) on the property, but canNOT force you to sell to satisfy the lien, best they can hope is that you refinance, and your lender requires you to pay them off -- and even then, everything is negotiable.

Good luck!

No attorney-client relatonship is created in responding to this question, and advice provided is based solely on very limited facts presented, and therefore may not be correct. You are advised that it is always best to contact a competent and experienced with the practice of law in the county in which you reside, particularly as it relates to family law, child support, custody and visitation (a/k/a "parenting time") issues, including 209A abuse-prevention restraining orders (a/k/a "ROs" in legal-speak), regarding un-emancipated children, under the age of 22.

Posted

Typically, a homestead only protects property from being forcibly sold by a judgment creditor. A judgment creditor is allowed to place a lien on the property and the lien must get paid when the property is sold or refinanced.

Creditors with court judgments have many methods at their disposal to collect. They are often allowed to garnish wages, attach bank accounts and seize other property that isn't protected under state laws called exemptions. I am posting a link to a general description of the exemption laws in all 50 states for you to review. Hope this perspective helps!

Erik Hammarlund

Erik Hammarlund

Posted

That's simply wrong. Homesteaded property is exempt from levy. Without intending to be unpleasant, might I suggest that Mass. state-law-specific issues be left to the Mass.-licensed attorneys?

Dorothy G Bunce

Dorothy G Bunce

Posted

A levy is a taking of the property, which is what I believe I said the homestead did protect.

Erik Hammarlund

Erik Hammarlund

Posted

This: "A judgment creditor is allowed to place a lien on the property" is not true.

Keith G Langer

Keith G Langer

Posted

From MGL c. 188, sec. 3: (b) An estate of homestead shall be exempt from the laws of conveyance, descent, devise, attachment, seizure, execution on judgment, levy and sale for payment of debts or legacies except as follows: (1) for a sale for federal, state and local taxes, assessments, claims and liens; (2) for a lien on the home recorded prior to the creation of the estate of homestead; (3) for a mortgage on the home as provided in sections 8 and 9; (4) upon an order by a court that a spouse, former spouse or parent shall pay a certain amount weekly or otherwise for the support of a spouse, former spouse or minor children; (5) where buildings on land not owned by the owner of the estate of homestead are attached, levied upon or sold for the ground rent of the lot upon which they are situated; and (6) upon an execution issued from a court of competent jurisdiction to enforce its judgment based upon fraud, mistake, duress, undue influence or lack of capacity.

Posted

You can homestead your residence; if the lot is legally part of your residence (through deed or merger) then it is covered by homestead. The attachment may be null and void unless it is written properly. However, depending on the ownership status and history of the lot, you may not have the lot covered in the homestead.

The lien may not affect you unless you need to refinance or sell, or unless they attempt to proceed against the property. (If so, you'll need to remove it through legal action.) You should hire a lawyer to look at the documents and explain your situation.

Do you want accurate, personalized, legal advice that you can rely on? You will have to hire an attorney, not ask on Avvo. I am not your attorney and am not creating an attorney-client relationship by this post. I am therefore giving only general advice. This advice may not apply to you or your situation; may not take account of all possibilities, and may not match the advice I would give to a client. DO NOT rely on this advice or any other advice on Avvo to make your legal decisions. If you want an answer to a legal question you should retain an attorney who is licensed in your state.

Posted

I added "Liens in Bankruptcy" to the practice areas because it sounds like the wolves may be circling and you might benefit from a free consult with one of the excellent bankruptcy lawyers in Western Mass. Based on the information provided, I think there is a good chance the adjacent lot would be considered part of your protected homestead, but you need to nail that down by consulting an experienced attorney in your area.

Massachusetts has one of the best homestead laws in the country. In fact, you don't even need to record a homestead to get automatic homestead protection. Elderly and disabled persons get even more favorable protection. But unfortunately, homestead protection doesn't prevent a collections firm that knows what it's doing from recording a good judgment lien against your home. This is the part where a lot of people get confused about homestead protection, though. If you've got $500,000 homestead protection, there is a good chance that, for people with average homes, no one will be able to sell your home out from under you to satisfy a debt or judgment.

If the creditor is patient (which most are not), they can let the judgment lien stand for years until you go to sell or refi -- or you move and another property becomes your new "homestead." Usually, as another attorney mentioned, creditors can find other unpleasant ways, like wage garnishment, to try and get your money or property to satisfy a judgment.

The law of real property attachments, liens, and homestead is tricky and highly technical -- even for lawyers. I would strongly advise against trying to defend yourself and your home from determined collections attorneys without an experienced lawyer. Good luck.

This is intended for general informational purposes only and does not constitute legal advice or create an attorney-client relationship.

Daniel Dufresne

Daniel Dufresne

Posted

To clarify: automatic homestead protection IS NOT as strong as homestead protection obtained from recording a homestead at the registry. Everyone who qualifies for a homestead in Massachusetts should execute and record one, period.

Posted

You should check to see if the lot is on the same deed as your residence. You can only declare a homestead on your property that is your residence. If there are 2 separate deeds (one for each property) then your homestead will not protect the lot. Usually, the only time it becomes a concern if when you refinance, re-mortgage, sell, transfer, etc. the property. Usually at that time the lien has to be paid or otherwise dealt with. Remember it can sometimes be negotiated. Also, remember that in bankruptcy (if the lien is attached to your residence) you can "avoid" the lien and remove it from attachment on your property.

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