Massachusetts Homestead Act Applies to Pre-Declaration Contracts

02 Nov Massachusetts Homestead Act Applies to Pre-Declaration Contracts

Any reader of the Massachusetts Homestead Act must conclude that it only protects homes from contracts incurred after the declaration is recorded. This is not true in the bankruptcy context.

This reading was first confirmed by the Van Rye Massachusetts bankruptcy court decision in 1995. A different bankruptcy judge then ruled otherwise in the 1996 Boucher decision, declaring that only Congress could define which debts were discharged and which were not, and nothing from Congress went to the timing of the homestead declaration’s filing. I was one of the 20,000 or so attorneys who fell out of our chairs over the shock of this ruling.

Two other Massachusetts judges ruled in favor of the 1996 Boucher decision. The Van Rye judge stood firm in his 1997 decision (Fracasso). A number of the cases went up on appeal and the First Circuit held in 1998 in favor of that 1996 Boucher decision (Patriot Portfolio, LLC v. Weinstein). The U.S. Supreme Court refused to accept a further appeal.

So it’s fine to record a homestead declaration after a contracted debt and protect your home in bankruptcy, but be absolutely certain that the declaration is recorded before the bankruptcy filing.

Massachusetts bankruptcy filers have a choice of protections, federal or state. Only the state list includes the $500,000 homestead but protections of other assets might be limited. You’ll need legal counsel to determine which list is best for you.

Other posts discuss protecting a homestead for occupant children even if the owner is absent, protecting the cash when a homesteaded home is sold after bankruptcy (but not before), protecting the homestead when the recording is within 1,215 days before the bankruptcy (despite the 2005 reforms), homesteading manufactured homes if under 62 and not disabled (no legal problem if either older or disabled), and the inability to homestead both a life estate and a self-created trust’s remainder interest.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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