Recording real estate deeds in a county registry is intended, among other things, to prevent fraud and ensure that a prospective buyer can verify that the seller actually owns the property for sale. In the rare case where a seller sells a property twice, if the first buyer promptly records her deed, the second buyer is considered to be "on notice" that the seller no longer owns the property, and thus the second deed is treated as void in light of the first, recorded, deed. This rule protects "first buyers" who record promptly from claims of ownership brought by others, and it protects potential "second buyers" from unwittingly accepting an invalid deed.
In a "Chapter 7" bankruptcy proceeding, a debtor's assets are liquidated, and the proceeds are divided among the debtor's creditors. Some of the debtor's assets, however, may be exempt from liquidation under various provisions of federal or state law. One such exemption is created by the Massachusetts Homestead Statute, M.G.L. c. 188, §§ 1, et seq. The Homestead Statute protects a debtor's home from most creditors, subject to certain restrictions. To qualify for this "homestead exemption," the debtor must be an owner of a home who occupies the home or intends to occupy it as a principal residence.