If you live in North Dakota and are concerned about protecting your home from creditors or lawsuits, it’s important to understand what the state’s homestead laws actually cover—and where their limits leave you vulnerable. The homestead exemption offers valuable protection for many homeowners, but it only goes so far. If your home equity exceeds the state limit, your assets could still be exposed.
This article walks through how North Dakota’s homestead exemption works, where the gaps are, and what you can do to shield the rest of your home equity.
What is the North Dakota Homestead Exemption?
The North Dakota Homestead Exemption is codified in North Dakota Century Code §§ 28-22-02(7), (10), and 47-18-01. It protects up to $150,000 of equity in your primary residence from most creditor claims.
This protection applies to:
- A primary residence, including a house, trailer, or mobile home
- Property you or your family currently occupy
- 2 acres if within a platted townsite
- 160 acres if not within a platted townsite
Who Qualifies?
To claim the homestead exemption, you must:
- Be a resident of North Dakota
- Use the property as your primary residence
- Record a Declaration of Homestead with the county recorder (See North Dakota Century Code §§ 47-18-18 – 20.)
Example
Let’s say your home is worth $400,000 and you owe $250,000. Your $150,000 equity would be fully protected
But what if you owe only $100,000? You then have $300,000 in equity—leaving $250,000 exposed to lawsuits.
Exceptions to the Homestead Exemption
Even if your home qualifies, the homestead protection does not apply to:
- Mortgages or deeds of trust
- Mechanics or labor liens
- Federal or state tax liens
- Judgments for unpaid child or spousal support
What If Your Equity Exceeds $150,000?
This is where many homeowners face risk.
With rising home values across North Dakota, it’s common for families to build up more than $150,000 in equity. Unfortunately, that excess equity is not protected by the homestead exemption.
Creditors can pursue a judgment lien on your home or force a sale in bankruptcy to access unprotected equity. And in non-bankruptcy situations, a recorded judgment can cloud your title or result in garnishment if you refinance or sell.
How to Protect Excess Equity in North Dakota
If your home equity exceeds the $150,000 exemption, you have options. Common legal tools include:
- Qualified Personal Residence Trust: Transferring your home to a properly created qualified personal residence trust may remove it from your personal estate and provide long-term protection.
- LLC Ownership: For non-primary residences or investment properties, titling in an LLC may help reduce personal liability.
- Equity Reduction Strategies: Taking a home equity line of credit (HELOC) or strategically using loans to reduce exposed equity can sometimes limit risk, though this must be done carefully.
Each of these strategies carries legal, tax, and financial implications. What works for one homeowner may not be appropriate for another, it’s important to consult with a professional.
Why You Should Speak with an Asset Protection Attorney
North Dakota’s $150,000 homestead exemption offers a useful layer of protection, but it likely won’t protect all of your home equity—especially as values continue to rise. The good news? There are proven legal tools to close that protection gap.
At Skabelund, we help North Dakota residents protect their homes and life savings from lawsuits, judgments, and other financial threats. We work with you to craft a tailored asset protection strategy based on your property, risk tolerance, and estate planning goals.
If your equity exceeds the homestead limit, don’t wait until it’s too late. Contact us today to learn how we can help you protect your most important asset: your home.
