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.
- Category: Bankruptcy
- Date:
- State: Rhode Island
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.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
