Connecticut Homestead Exemption Statute

Connecticut is one of many states that gives debtors protection from losing everything to a creditor. Even if a creditor obtains a judgment -- a court ruling that the money is owed to her -- Connecticut statutes protect some of the debtor's property, including his homestead, from seizure and sale. Connecticut defines a homestead as owner-occupied real estate that serves as the owner's primary residence.

Money Judgments

If a debtor refuses to pay, a creditor can go to court to obtain a judgment against him. Using the judgment, the debtor can file a lien on any nonexempt property, then execute the lien -- having a state marshal seize property for sale or collecting the debt from the debtor's bank account. The creditor has to work through a marshal rather than taking the property himself. If the property sells for more than the debt owed, any excess goes back to the debtor.

Exemption

Connecticut wrote a homestead exemption into its laws in 1993. As of 2011, the amount remains the same as in 1993 -- $75,000 in exempt equity. The state amended the exemption in 2003 to exempt $125,000 if the creditor is a hospital. If the home is jointly owned by a married couple, the exemptions double in value. A creditor can only execute a lien against a home if the home's value is greater than the mortgage debt plus the exemption.

Considerations

The Connecticut homestead exemption doesn't protect homeowners from all liens. Mortgages, for example, are voluntary liens on a home; if a homeowner defaults on the mortgage, the exemption statute doesn't protect him from foreclosure. The same applies if the homeowner took out a home equity loan or home equity line of credit. If a lender or other third party makes a claim on a home that would preclude the judgment creditor taking it, the creditor can ask a judge to decide between their claims.

Bankruptcy

Connecticut extends the same protection to homeowners facing Chapter 7 bankruptcy. In Chapter 7, a court-appointed trustee can seize and sell the bankruptcy petitioner's assets, then use the money to settle some of the petitioner's debts; only after the sale will the court discharge the remaining debts. The federal government and many states exempt some property from Chapter 7 sale. In Connecticut, the trustee can't touch a home with less than $75,000 equity, or $150,000 for couples.