Louisiana Homestead Laws

If you’ve ever fallen on hard times financially, you’re first worry might’ve been, “What’s going to happen to my house?” If you live in the Bayou State, you may have a little less to worry about. Louisiana, like many states, has homestead protection laws intended to protect people from losing their homes in the unfortunate case of a bankruptcy. Homestead statutes can allow you to set aside a specific amount of real property which would remain off-limits to certain kinds of creditors. Here is a brief overview of homestead laws in Louisiana.

Louisiana Homestead Statutes

Although they allow you to protect some property from debt collectors there are limits to state homestead laws. Louisiana’s constitution dictates that only 160 acres and $7,500 in property value can be designated as a homestead. Disabled military veterans rated with 100 percent "unemployability" are eligible for a homestead exemption of $150,000.

The basics of homestead protections in Louisiana are listed below.

Even with these homestead protections in place, there are four other exceptions in which case you may be forced to sell or forfeit property:

• If there was a pre-existing lien on the property before the establishment of homestead;
• If the homestead property was specifically pledged as credit for a mortgage;
• If you owe past due taxes to the State of Louisiana and Louisiana counties or municipalities; or
• If you owe money to mechanics, contractors, or builders for work performed in repairing or improving the property.

Also, Louisiana’s homestead protections are generally confined to state law and therefore in-state debt. Meaning federal law, or a federal debt, may override it. (The Supremacy Clause of the United States Constitution dictates that where state and federal law conflict, federal always trumps.) To take an example, if you had federal income tax liens, those would be superior to Louisiana’s homestead exemptions. Even so, the federal government, by way of the Internal Revenue Service (IRS), has been reluctant to foreclose on a citizen’s home in order to collect on a tax debt. Generally, the IRS only gets involved if the homestead property is either mortgaged or sold before the federal tax lien expires.

Louisiana Homestead Laws: Related Resources

Real estate law, and its intersection with bankruptcy law, can seem impossible to comprehend. You can visit FindLaw’s homestead protections section for additional resources and information on this topic. You can also contact a Louisiana real estate attorney or a Louisiana bankruptcy attorney if you would like legal assistance with a real estate or bankruptcy matter.