Louisiana House To Consider Raising Homestead Exemption!

The Louisiana Legislature began its 2009 regular Legislative Sessions on Monday, April 27, 2009.

Two bills are before the Louisiana House of Representatives that would raise the Homestead Exemption from seizure of a house by unsecured creditors.

The homestead exemption from seizure is not to be confused with the homestead exemption that most Louisiana residents are aware of that limits taxes on a homestead to the amount of the value of the house that is in excess of $75,000.00.

The homestead exemption that is at issue is the one that exempts a portion of the value of a Louisiana residents home from seizure from unsecured creditors.  Currently this exemption is only $25,000.00.

That means that if you own a house that has equity greater than $25,000.00, an unsecured creditor can sell your house out from under you.  You get the first $25,000.00 of the sale, the unsecured creditor gets the rest, and you are homeless.

The homestead exemption from seizure is also important if you should decide to file for bankruptcy, since and equity above $25,000.00 is a potential asset of your bankruptcy, and, depending upon how much equity there is above $25,000.00, your house is at risk of sale by the trustee in bankruptcy to pay your unsecured creditors.

The first bill, House Bill 261 by Louisiana Representative Patrick Connick, would increase the homestead exemption from seizure to $100,000.00.

The second bill, House Bill 678 by Louisiana Representative Gary Smith, would result in the full value of the homestead being exempt from seizure.

Please contact your Louisiana Legislator and ask them to vote for House Bill 261 and House Bill 678.

The banking lobby in Louisiana has successfully killed similar bills over that past ten years.  If is time to have a real homestead exemption from seizure in Louisiana.