Opinion Date: August 17, 2023

Judge: Donovan

Areas of Law: Bankruptcy, Real Estate & Property Law

This case began in December 2021 when plaintiff Katherine Brady filed a Chapter 7 bankruptcy petition.  At the time of the petition, plaintiff resided with her husband and children in a single-family residence. The property was titled only in plaintiff’s name.  On Schedule C of the petition, plaintiff claimed a homestead exemption under RSA 480:1 for $120,000. Subsequently, plaintiff amended her petition to claim an additional $120,000 homestead exemption on behalf of her non-debtor, non-owner spouse.

The Chapter 7 Bankruptcy Trustee filed an objection to the second claimed homestead exemption.  In March 2022, plaintiff converted her case to one under Chapter 13.  Subsequently, plaintiff amended Schedule D of her petition to add a second secured claim for her spouse for $120,000 based upon her spouse’s claimed homestead exemption.

Defendant Lawrence Sumski, Chapter 13 Bankruptcy Trustee, asserted the same homestead exemption objection as the predecessor Chapter 7 Trustee.  Following a hearing, the Bankruptcy Court concluded that to maintain a homestead right pursuant to RSA 480:1, a person had to demonstrate both occupancy and ownership interests in the homestead property.  Because plaintiff’s husband was not an owner of the property, the court concluded that he was not entitled to a homestead exemption under RSA 480:1, and plaintiff could neither assert a homestead exemption on behalf of her husband, nor claim that he possesses a lien that secures his interest in the property.

The New Hampshire Supreme Court concluded RSA 480:1 included an ownership requirement that applied to all real property occupied as a homestead and a non-owning occupying spouse of another who held a homestead right, pursuant to the statute, did not hold a present, non-contingent homestead right of his or her own. 

With respect to the district court’s second question, the Supreme Court exercised its discretion and declined to answer because a response to that question was not “determinative of the cause then pending in the certifying court.”

I’ve included the NH Bankruptcy Court’s decision in the link below.  As always, if you have any questions about Bankruptcy, Commercial Litigation, Business Law or related Real Estate issues in Massachusetts, New Hampshire or Connecticut, please contact me or Josh Burnett at wamann@amburlaw.com or jburnett@amburlaw.com.  Thank you.