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11/18/2013

Homestead Exemption Protected in Cash

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In Utah, debtors can protect as much as $30,000 of value in a primary personal residence under Utah Code Section 78B-5-503.  This is known as the homestead exemption.  On October 24, 2013, the Utah Court of Appeals issued its opinion in Jackson v. Halls, 2013 UT App 254, which addresses this exemption. 

In Jackson v. Halls, Jackson executed on and purchased the personal residence of Halls with a credit bid at the Sheriff's sale.  After the sale, Jackson gave Halls a credit for the value of the homestead exemption toward the judgment against Halls rather than pay Halls in cash.  Of course, Halls objected and moved to have the trial court compel payment in cash. 

Jackson argued that Halls was not entitled to a cash payment from the sale, because Jackson purchased the residence with a credit bid rather than with cash.  Jackson reasoned that because no cash passed hands through the Sheriff's sale the homestead exemption was satisfied by Jackson granting a credit against the judgment.  The trial court agreed and denied the motion.

Recognizing that Jackson's position undermined the purpose of the exemption, the Court of Appeals reversed the trial court.  The Court of Appeals noted that Utah Code Section 78B‐5‐503(5)(b) protects the value of the homestead exemption from further execution for a one-year period.  If a creditor were able to avoid cashing out the debtor's homestead exemptions simply by purchasing the debtor's residence with a credit bid, the one-year protection would be meaningless.  Accordingly, in the future, creditors must come prepared to cash out the debtor's homestead exemption when they make credit bids for the purchase of primary personal residences at Sheriff's sales.

Copyright © Daniel L. Day 2013

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9 Comments
Probate Lawyer Lawyer Miami link
9/16/2017 06:27:38 am

Debitors must go with such lawyers who can help them to not to waste their time and money on purchasing residence's

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Bernard Crosby link
12/6/2020 08:47:44 pm

Thanks foor the post

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I
6/26/2022 01:06:06 pm

Jj8 ui

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Eric Johnson link
3/11/2023 06:17:54 am

Jackson reasoned that because no cash passed hands through the Sheriff's sale the homestead exemption was satisfied by Jackson granting a credit against the judgment. Thank you for sharing your great post!

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Eugene Machin link
3/11/2023 12:25:09 pm

The exemption also protects the value of residents' homes from property, creditors, and circumstances that arise from the death of the homeowner's spouse.

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Jack Braaten link
6/21/2023 11:31:59 am

If you own your primary residence, you are eligible for the homestead exemption on your Real Estate Tax. The homestead exemption reduces the taxable portion of your property’s assessed value.

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Sidney Shin link
6/23/2023 02:03:08 pm

On the off chance that you own your main living place, you are qualified for the property exception on your Land Assessment. The estate exception diminishes the available part of your property's evaluated esteem.

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Derek Thomas link
6/29/2023 09:24:26 am

Jackson contemplated that on the grounds that no money went hands through the Sheriff's deal the estate exclusion was fulfilled by Jackson conceding a credit against the judgment. Much obliged to you for sharing your extraordinary post!

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Darrel Bachus link
6/29/2023 10:30:28 am

That Halls was not entitled to a cash payment from the sale, because Jackson purchased the residence with a credit bid rather than with cash. Thank you for taking the time to write a great post!

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    Daniel L. Day is a real estate and construction law attorney.  The posts Mr. Day makes to this site are for informational purposes only and not for providing legal advice.  Your use of this site will not create an attorney-client relationship between you and Mr. Day and will not be subject to the attorney-client privilege.  If you have a legal concern, you should seek the advice of legal counsel and should not rely on the information on this site.  Comments to this site are the opinions of the authors and may not reflect Mr. Day's opinions.  All posts and comments to this site are intended to be made public and are not confidential.

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