12. The Shapiros owned a house together as community property. Mrs. Shapiro, without her husband's knowledge, homesteaded the property. The property was worth $330,000, and there was a loan against it for $319,000. A creditor then obtained a judgment against the Shapiros. If the creditor records a judgment lien, then:
A. the house will be sold to pay the judgment because the exemption exceeds the equity
B. the house will not be sold because there is insufficient equity
C. the house will be sold because the homestead is invalid as only one spouse filed it
D. the house will be sold because only the wife's homestead exemption applies, which is worth only $10,000
- Question #12
- Answer: B
- Explanation: The equity in the house is only $11,000 ($330,000 less $319,000). This is less than the $75,000 homestead exemption available to family units, so the creditor cannot force the house to be sold in order to satisfy the judgment. Only one spouse needs to file a declaration of homestead for a family unit, even if the house is owned as community property.