The Delaware Homestead Exemption

If you file for bankruptcy in Delaware, the Delaware homestead exemption protects up to $125,000 of equity in your home.

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If you file for bankruptcy in Delaware, the Delaware homestead exemption protects up to $125,000 of equity in your home. Here you’ll find specific information about the homestead exemption in Delaware.

For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.

The Delaware Homestead Exemption Amount

Under the Delaware exemption system, homeowners may exempt up to $100,000 in 2011 and $125,000 in 2012 of their home or other property covered by the homestead exemption. Also, for disabled persons unable to work or a married couple where one spouse is at least 65 years old, the homestead exemption is $125,000.  However, the property must be your principal residence.

Doubling for Married Couples

In Delaware, there is no doubling for married couples.  In certain states, married couples filing a joint bankruptcy are allowed twice the amount of the homestead exemption.  But this is not the case in Delaware.

(There may be other advantages to filing a joint bankruptcy. To learn more , see Nolo's section on Bankruptcy Options for Married Couples.)

The Scope of the Delaware Homestead Exemption

In Delaware the homestead exemption applies to real property, including your home, condominium, and manufactured home.

Can You Use the Federal Bankruptcy Exemptions in Delaware?

Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of the state exemptions. Delaware is not one of those states. If you reside in Delaware you must use the state exemptions.

(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)

Homestead Declarations

In Delaware the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy.

Real Property Held as Tenancy in the Entirety in Delaware

If property is held as a tenancy in the entirety, it means the property is jointly owned by a married couple as a single marital entity, not as individuals. In a Chapter 7 bankruptcy, the trustee can only sell your property held as a tenancy in the entirety to pay joint debts of both spouses -- the trustee cannot sell it to pay individual debts if only one spouse files.  So if only one spouse files bankruptcy to wipe out his or her individual debts, then any property, including your home, that is held as a tenancy in the entirety is usually safe and cannot be sold to pay those creditors.

Finding the Delaware Homestead Exemption Statute

Delaware’s homestead exemption is found in the Delaware state statutes at Delaware Code Annotated Title 10, § 4914 (c)(1). To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.

Periodic Adjustments of Delaware Exemption Amounts

The Delaware homestead exemption statute sets forth the amount of the exemption for 2010, 2011, and 2012.  The amounts will likely adjust again for 2013 and subsequent years.  Make sure to check the current exemption amounts prior to filing bankruptcy to ensure that you can protect all of your property.

by: , Attorney

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