Homestead Exemptions

A lawsuit has been filed and the judgment has been rendered, awarding the winning party money damages. How can the winning party collect? One popular way is by placing a judgment lien on the loser’s (“judgment debtor”) real property. A judgment lien allows the winner (“judgment creditor”) to attach their judgment from court to the real property that the judgment debtor currently owns and any real property later acquired. If you have a judgment lien against your property or are considering attaching a judgment lien on a debtor’s real property, it is important to be familiar with the applicable Arizona statutes and the protections Arizona provides for judgment debtors.

One of the most effective protections against judgment liens is the homestead exemption. Homestead exemptions have been implemented in almost every state, including Arizona, and promote the idea that being able to peaceably reside in a home takes precedence over a creditor’s right to collect a judgment. Pursuant to Arizona Revised Statutes (“A.R.S.”) §33-1101, any person 18 years or older who resides in Arizona may hold as homestead exempt, an interest in real property up to $150,000. To qualify, the real property must be in one compact body upon which a dwelling house exists and the person must reside there. The exemption protects theproperty from attachment, execution, and forced sale. In accordance with A.R.S. 33-1102, a person who is entitled to a homestead exemption holds that exemption by operation of law so no action is required on behalf of the homeowner.

Pursuant A.R.S. § 33-964, a judgment becomes a lien on all of the judgment debtor’s real property, except the real property exempt from execution. This includes homestead property in the county that it is recorded. According to A.R.S. § 33-964, a recorded judgment shall not become a lien on any homestead property. Any person entitled to a homestead on real property holds the homestead property free and clear of the judgment lien. Although Arizona provides homeowners protection from judgment liens through the use of the homestead exemption, it is important to keep in mind that judgment creditors are able to attach to a person’s interest in realproperty that exceeds $150,000 in value.

Whether you are a potential judgment debtor or creditor, be informed of the relevant Arizona laws and the rights of both parties as it pertains to judgment liens. If you have any questions regarding judgment liens, contact me or an attorney experienced in real estate law.