New Hampshire Homestead Laws

There’s often concern that filing Chapter 7 bankruptcy means the trustee may sell your house to pay off creditors. While this is a very real possibility, especially for debtors who have a lot of equity in their primary residence, there are protections in place that may help you keep your family home.

New Hampshire, like most other states, offers debtors a homestead exemption. Under RSA Section 480:1, the New Hampshire homestead exemption is one of the most generous in the county. It allows you to protect up to $400,000 (single filers) and $550,000 (married couples and co-owners).

This article examines and explains the New Hampshire homestead exemption, including amounts and limitations. It also shows you how to claim the exemption if you file Chapter 7 or Chapter 13 bankruptcy. If you’re considering filing bankruptcy or have questions about your state’s homestead exemption, contact a local bankruptcy attorney.

How Does the Homestead Exemption Work in Bankruptcy?

When you file bankruptcy, you must provide the trustee with several “Schedules.” One is a list of your assets, while another is a list of the exemptions you intend to claim.

If you own your primary residence, you must list the property on your asset schedule. You must also provide the fair market value or most recently assessed value of the home.

The best way to protect the equity in your home and keep it from being sold to pay off creditors is to claim the “homestead exemption,” which you must cite on “Schedule C.” In New Hampshire, you must list the following information when claiming the state homestead exemption:

• Description of the homestead property/real estate
• Current assessed value
• Amount of equity in your home
• Proof of ownership
• Proof of equity
• Information on any liens that are on the property

You can prove that you’re a homeowner by providing the court with all required documents, including your most recent property tax records, a copy of your deed, and a recent mortgage statement. As long as you take the appropriate steps to claim the homestead exemption, some or all of your home equity will be safe from creditors.

New Hampshire Homestead Protection and Bankruptcy

New Hampshire is one of the most generous states for homestead protection. While the federal homestead exemption is $31,575 for single filers and $63,150 for married couples who file a joint bankruptcy, the New Hampshire homestead exemption is $400,000 for single filers and, for co-owners or married couples, $550,000. This may cover the full equity in your home.

Let’s say that your New Hampshire home is worth $375,000. After living there for 15 years, you’ve amassed $325,000 in equity. When your financial situation requires you to file a Chapter 7 bankruptcy case, there’s fear that the trustee may force you to sell your house to pay off your many creditors. Once you apply the New Hampshire homestead exemption, your house will be safe from a forced sale. Since the exemption covers up to $400,000 and your equity totals $325,000, your home is protected.

While real estate prices are higher in New England states like New Hampshire and Massachusetts than in much of the rest of the country, the higher-than-average exemption can be a tremendous help. Read on to learn more about the state’s homestead exemption.

Restrictions and Limitations on New Hampshire’s Homestead Exemption

Restrictions and limitations apply when using the New Hampshire homestead exemption. While the exemption is automatic and you don’t have to file a separate “Declaration of Homestead,” you must meet certain eligibility criteria.

Under New Hampshire law, the following requirements apply to the homestead exemption:

• The exemption only applies to your primary residence. You cannot use it to protect rental properties or vacation homes.
• The New Hampshire homestead exemption does not prevent all creditors from pursuing a forced sale of your home. For example, if there is a lien against your house, the lienholder can ask the trustee to sell your house.
• You must have lived in your home for at least 730 days (two years) for the exemption to attach. If you don’t qualify, you’ll still be covered by federal law. However, the federal exemption amount is capped at $214,000.

Before filing a bankruptcy petition, it’s a good idea to seek legal advice from an experienced New Hampshire bankruptcy lawyer.

Some Debts Are Immune to Homestead Protection

There are certain debts that can pierce homestead protection. If you owe any of these debts when you file bankruptcy, the creditor can file an objection to your claiming the exemption.

Under New Hampshire law, the following debts are not affected by the homestead exemption in bankruptcy:

• Mortgage foreclosure: Your mortgage lender can initiate foreclosure proceedings if you are not current on your mortgage
• Property lien or tax lien: If there is a tax lien on your property, the homestead exemption will not preclude a sale
• Mechanic’s lien: Mechanic’s liens must be satisfied before your bankruptcy debts can be discharged

If you’re worried that your real property won’t be protected in bankruptcy, speak with a bankruptcy attorney before filing. They’ll review your ownership interest in the property and let you know if the homestead exemption will apply.

What Types of Property Are Eligible for the New Hampshire Homestead Exemption?

New Hampshire bankruptcy exemptions should cover just about any property that you use as a dwelling for the state’s homestead exemption. Some of the properties that are protected by the homestead exemption include:

• Single-family homes
• Townhouses
• Condominiums
• Mobile homes
• Manufactured housing

If you have questions about whether the land your house lies on is covered by the exemption, contact a local law office that handles bankruptcy cases. They’ll answer any questions you have about your homestead rights under bankruptcy.

Disclaimer: State laws frequently change due to new legislation, higher court rulings, and other means. While FindLaw strives to provide the most current information, contact a local New Hampshire bankruptcy attorney to verify your state laws.

Contact an Experienced New Hampshire Bankruptcy Lawyer for Help

The bankruptcy process can be difficult to navigate. With so much at stake, there’s no shame in getting assistance. An experienced bankruptcy attorney will help ensure that you file your petition properly and maximize the New Hampshire homestead exemption. They’ll review your situation, explain your options, and help give you peace of mind throughout the process.