The Chapter 7 trustee objected to Mrs. Goulakos’s claim of exemption because she did not live in the house and because she was not the one who claimed the homestead exemption under Massachusetts law.
In 1991 Mr. and Mrs. Goulakos bought a house in Dracut, Massachusetts. However, in 2000 Mrs. Goulakos left the home and move to Lowell, Massachusetts and purchased a residence there. She later sold the Lowell, Massachusetts home to her son but continued to reside in the property until the filing of her bankruptcy petition.
About twenty years after the Dracut, Massachusetts property was purchased, Mr. Goulakos filed a declaration of homestead exemption. Mrs. Goulakos never personally filed a declaration of homestead properties for either the Dracut or Lowell, Massachusetts properties. In addition, Mrs. Goulakos testified at her 341 meeting of creditors hearing that she did not intend to return to the Dracut property and was not intending to reconcile with her husband.
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In her bankruptcy chapter 7 case, the bankruptcy schedules reflected that the Dracut property was owned jointly with her husband and that there was a mortgage against the property in the approximate amount of $98,000.00 and that the property had a fair market value of approximately $248,000.00. This meant that Mrs. Goulakos shared approximately $145,000.00 in equity in the property with her husband.
The chapter 7 trustee’s position was that Mrs. Goulakos could not claim the exemption because she never filed the homestead exemption herself and because and that she abandoned the Dracut property when she moved to the Lowell property. Mrs. Goulakos indicated that her domicile was irrelevant to this issue and that because she was a member of Mr. Goulakos’s family she could still claim the exemption.
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Pursuant to the former Massachusetts Homestead Act, which governed this case, provided that an estate of homestead to the extent of $500,000.00 in land and buildings could be acquired and that only one one owner may acquire the homestead for the benefit of a family. According to the statute a husband or wife was considered to be a family member.
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In ruling for Mrs. Goulakos and against the chapter 7 trustee, the court ruled that she could claim the homestead exemption because she was legally family under the statute and because her homestead exemption was not lost by her abandoning when she left the Dracut property and had no intention of returning. If you have questions about chapter 7 bankruptcy Massachusetts or chapter 13 bankruptcy, please email roger@chapter7attorneys.com
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