Bankruptcy/Debtor-Creditor Rights Blog

QUALIFYING AS HEAD OF HOUSEHOLD FOR HOMESTEAD EXEMPTION IN ARKANSAS

Posted June 15, 2010

Author: Chris A. McNulty

In a 2010 Western District of Arkansas bankruptcy decision, the court held that a single female with no children but who intermittently had family members stay at her home qualified as head of household for homestead exemption purposes.  In re Purvis, ___B.R.___, 2010 WL 1544348 (Bankr. W.D. Ark. 2010).  Article 9 of the Arkansas Constitution exempts the homestead of any Arkansas resident who is married or head of a family from certain liens and judgments.  Ark. Const. art. 9, § 3.  Arkansas courts consider three factors in determining whether a debtor qualifies as head of family: (1) An obligation on the debtor to support others residing in the household; (2) existence of a corresponding state of dependence upon those being supported; and (3) existence of a role of authority for the head of the family.  In re Purvis, 2010 WL 1544348 at *1.  The debtor does not have to be married or a parent but “something more than a mere aggregation of individuals residing in the same house is required.”  Id. at *2 (internal quotation omitted).  The homestead exemption is meant to protect families from dependence and want and is to be liberally construed in favor of the person asserting the exemption.  Id.

In In re Purvis, the court analyzed Purvis’s relationship with three individuals that lived with her over the previous six years to determine her eligibility as head of family.  Id.  The presence of a fiancé who was unemployed for only six months did not qualify Purvis as head of family; however, the other two relationships combined to qualify Purvis as head of household.  At one time or another, Purvis had one or the other of her two brothers living with her.  One brother (Gary), in the midst of a separation from his wife, stayed with Purvis several nights a week over a three year period; he spent the other nights at his mother’s home.  Gary was not employed and did not contribute to household expenses.  Prior to his death, the second brother (Cecil) resided with Purvis several nights a week and resided at his own residence or his mother’s the rest of the time.  Cecil had limited abilities due to two brain surgeries.  The court concluded that the “obligation factor” for determining head of household did not have to be one of a legal nature and that if Purvis felt a moral obligation to support her brothers that would satisfy the requirement.  Cecil’s health conditions and Gary’s financial dependence were enough to satisfy the second factor of “corresponding state of dependence.”  The third factor, existence of a role of authority, was deemed to be satisfied by Gary’s testimony that he was under Purvis’ authority when he is in her home.  Despite the fact that Cecil was deceased prior to Purvis filing bankruptcy, she is still entitled to the exemption.  “A homestead claimant who acquires the right to a homestead exemption is not subsequently deprived of the homestead exemption by the death of family members.”  Id. at *3.  As Purvis’s relationships with her brothers satisfied the three factors required to qualify for head of household, Purvis was entitled to the homestead exemption.

In re Purvis provides an example of how the homestead exemption works in Arkansas.  The Arkansas Constitution calls for a married person or head of family to qualify for the exemption; it is important to keep in mind that “head of family” is a flexible concept and may apply to    non-traditional circumstances.  Lenders should always ensure that the “homestead exemption waiver” language is in their loan documents, even if the borrower does not appear to qualify for the exemption at first glance.

« BACK