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Delaware Homestead Exemption Increases in 2010

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Delaware Homestead Exemption Increases in 2010

Prior to this year, Delaware’s consumer bankruptcy laws were already far more lenient than most other states.  Delaware allowed homeowners to exempt up to $50,000.00 of equity in their primary residence if they were to declare bankruptcy.  What that means to homeowners is this:  if you were to declare bankruptcy and you were able to afford to continue paying your monthly mortgage payment, your home could not be sold to satisfy your unsecured debts (i.e. credit card debts, hospital bills, parking tickets, etc) if you did not have equity in your home exceeding $50,000.00.

 With the economic climate the way it is, the Delaware General Assembly has increased the homestead exemption to $75,000.00 in 2010, $100,000.00 in 2011 and $125,000.00 in 2012.  What this means for those in economic trouble now is that, if you are able to afford your monthly mortgage payment, you can safely declare bankruptcy to shed unsecured debt and keep up to $75,000.00 of any equity you currently have in your home.  If your expecting economic trouble in the future, i.e., layoffs, pay cuts, loss of a loved one, etc., Delaware has decided that you can exempt up to $100,000.00 of your equity in 2011 and $125,000.00 in 2012. 

 Along with the homestead exemption, Delaware also allows exemptions for personal property and other real estate that is not your primary residence.  If the total value of your personal property is $25,000.00 or less, that property is exempt from bankruptcy proceedings, and may not be sold to satisfy unsecured creditors