Will I Lose My Home in Rhode Island if I File Bankruptcy?
Full Question:
I will be losing my job in August and am wondering if I have to file bankruptcy, will I lose my house? I owe more then the house is appraised at now than when I bought it.
06/29/2009 |
Category: Bankruptcy |
State: Rhode Island |
#17240
Answer:
In Rhode Island, a person can choose either the federal or state bankruptcy exemptions. Under federal law, up to $16,500 of real property may be exempt from creditors' claims. Under state law, there is a $300,000 exemption for a homestead, but it doesn't apply to a purchase money mortgage, and other exceptions apply.
Please see the following RI statute:
§ 9-26-4.1. Homestead estate exemption. —
(a) In addition to the property exempt from attachment
as set forth in § 9-26-4, an estate of homestead to the
extent of three hundred thousand dollars ($300,000) in the
land and buildings may be acquired pursuant to this
section by an owner or owners of a home or one or all who
rightfully possess the premise by lease or otherwise, and
who occupy or intend to occupy the home as a principal
residence. The estate of homestead provided pursuant to this
section shall be automatic by operation of law, and without
any requirement or necessity for the filing of a
declaration, a statement in a deed, or any other
documentation. The estate shall be exempt from the laws of
attachment, levy on execution and Sale for payment of debts
or legacies except in the following cases:
(1) Sale for taxes, sewer liens, water liens, lighting
district assessments and fire district assessments;
(2) For a debt contracted prior to the acquisition of the
estate of homestead;
(3) For a debt contracted for the purchase of the home;
(4) Upon an order issued by the family court to enforce its
judgment that a spouse pay a certain amount weekly or
otherwise for the support of a spouse or minor children;
(5) Where a building or buildings are situated on land not
owned by the owner of a homestead estate are attached,
levied upon or sold for the ground rent of the lot upon
which the building or buildings are situated;
(6) for a debt due to, or a lien in favor of, the department
of human services and/or the state of Rhode Island for
reimbursement of medical assistance, as provided for in
§ 40-8-15;
(7) For a debt heretofore or hereafter owing to a federally
insured deposit taking institution or a person regulated or
licensed under title 19.
(b) For the purposes of this section, "owner of a home"
includes a sole owner, joint tenant, tenant by the entirety
or tenant in common; provided, that only one owner may
acquire an estate of homestead in the home for the benefit
of his or her family; and provided further, that an estate
of homestead may be acquired on only one principal residence
for the benefit of a family. For the purposes of this
section, "family" includes either a parent and child or
children, a husband and wife and their children, if any, or
a sole owner. The provisions of this section shall not apply
to any debt owing to a financial institution, or private
mortgages, or a mechanics' lien on the property comprising
the estate as provided for under chapter 28 of title 34.
Notwithstanding any other provisions of law, it shall not be
necessary to record a declaration of homestead in order to
take advantage of the homestead estate exemption.
