April 11, 2017
In bankruptcy, a homestead exemption protects equity in your home. Here you’ll find specific information about the homestead exemption in Idaho.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy.
Under the Idaho exemption system, homeowners can exempt up to $100,000 of equity in their home or other property covered by the homestead exemption. If you file for Chapter 7 bankruptcy, and your equity is less than $100,000, you'll be able to keep it (as long as you're current on your payment and continue to maintain it).
If you have more than $100,000 worth of equity in your house, then you risk the trustee selling the house to pay your creditors. However, before making any distribution to your creditors, the trustee would have to pay you your exemption amount of $100,000 from the sale proceeds.
In a Chapter 13 bankruptcy, you can keep your house even if your equity exceeds $100,000; however, you'll likely have to pay your creditors the value exceeding the exemption amount.
In Idaho, the homestead exemption applies to real property, including your home, condominium, or a mobile home. You don’t have to occupy the property to claim the exemption. However, if you don’t occupy the property, you have to record a homestead declaration before you can take advantage of the homestead exemption.
The homestead exemption also applies to sale proceeds from the sale of the property. However, the homestead exemption can only be used to exempt the sale proceeds during the six month period after the sale.
Idaho doesn't allow married couples to double the amount of the homestead exemption. A couple can double most other Idaho exemptions, however.
(To learn more, see Bankruptcy Options for Married Couples.)
Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of the state exemptions. Idaho, however, does not. If you reside in Idaho you must use the state exemptions. In this case, it's unlikely to matter given that Idaho's homestead exemption is more favorable than the equivalent federal exemption.
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Idaho the homestead exemption is automatic; you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy if you occupy the property.
However, if you don’t yet occupy the property, you must file a homestead declaration (a form filed with the county recorder’s office to put on record your right to a homestead exemption) before you file for bankruptcy in order to claim the homestead exemption. Contact your county recorder for information on how to file a homestead declaration.
Idaho bankruptcy exemption amounts are adjusted periodically to account for inflation. Check that the amount hasn't changed since the publishing of this article.