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CA Bankruptcy Exemptions

California Bankruptcy Exemptions

CalculationIn California, there are two sets of exemptions for you to choose from. They are listed in the California Code of Civil Procedure, Sections 703 and 704. Each set offers its own advantages. However, you cannot use both sets; you must choose one set or the other. You must carefully examine your assets in total, and choose which set is best suited to protect your assets.

California Bankruptcy Exemption System 1

Homestead

Real or personal property you occupy including mobile home, boat, stock cooperative, community apartment, planned development or condo

(1) Seventy-five thousand dollars ($75,000) unless the judgment debtor or spouse of the judgment debtor who resides in the homestead is a person described in paragraph (2) or (3).

(2) One hundred thousand dollars ($100,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead a member of a family unit, and there is at least one member of the family unit who owns no interest in the homestead or whose only interest in the homestead is a community property interest with the judgment debtor.

(3) One hundred seventy-five thousand dollars ($175,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead any one of the following:

(A) A person 65 years of age or older.

(B) A person physically or mentally disabled who as a result of that disability is unable to engage in substantial gainful employment. There is a rebuttable presumption affecting the burden of proof that a person receiving disability insurance benefit payments under Title II or supplemental security income payments under Title XVI of the federal Social Security Act satisfies the requirements of this paragraph as to his or her inability to engage in substantial gainful employment.

(C) A person 55 years of age or older with a gross annual income of not more than twenty-five thousand dollars ($25,000) or, if the judgment debtor is married, a gross annual income, including the gross annual income of the judgment debtor’s spouse, of not more than thirty-five thousand dollars ($35,000) and the sale is an involuntary sale.

(b) Notwithstanding any other provision of this section, the combined homestead exemptions of spouses on the same judgment shall not exceed the amount specified in paragraph (2) or (3), whichever is applicable, of subdivision (a), regardless of whether the spouses are jointly obligated on the judgment and regardless of whether the homestead consists of community or separate property or both. Notwithstanding any other provision of this article, if both spouses are entitled to a homestead exemption, the exemption of proceeds of the homestead shall be apportioned between the spouses on the basis of their proportionate interests in the homestead.

Motor Vehicle

Motor vehicles to $1900, or $1900 in auto insurance if vehicle(s), lost, damaged or destroyed (husband and wife may not double)

Personal Property

  • Household items and personal effects – 704.020.
  • Residential building materials to repair or improve home up to $3,050 – 704.030.
  • Jewelry, heirlooms and works of art up to $7,625 – 704.040.
  • Health aids – 704.050.
  • Bank deposits arising out of Social Security payments up to $3,050 for a single payee ($4,575 for husband and wife payees) and unlimited if funds are not commingled; bank deposits from other public benefit payments up to $1,525 ($2,275 for husband and wife as joint payees) – 704.080.
  • Personal injury and wrongful death causes of action and recoveries that are necessary for support – 704.140 & 704.150.
  • Cemetery and burial plot – 704.200.

Wages

  • 75% of wages paid within 30 days prior to filing bankruptcy – 704.070.
  • Public employee vacation credits (at least 75% if receiving installment payments) – 704.113.

Retirement & Pensions

  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans) – 11 U.S.C. § 522.
  • IRAS and Roth IRAs to $1,245,475 – 11 U.S.C. § 522(b)(3)(C)(n).
  • Public retirement benefits – 704.110.
  • Private retirement plans and benefits, including IRA and Keogh – 704.115.
  • Public employees – Cal. Gov’t Code § 21255.
  • County employees – Cal. Gov’t Code § 31452.
  • County peace officers – Cal. Gov’t Code § 31913.
  • County fire fighters – Cal. Gov’t Code § 32210.

Public Benefits

  • Unemployment and disability benefits, and union benefits due to labor disputes – 704.120.
  • Workers’ compensation benefits – 704.160.
  • Public assistance benefits – 704.170.
  • Relocation benefits – 704.180.
  • Student financial aid – 704.190.

Tools of Trade

  • Tools, implements, materials, books, uniforms, instruments, one commercial vehicle, equipment, and furnishings up to $7,625 total, or up to $15,250 if used by both spouses in the same occupation. Commercial vehicle up to $4,850, or $9,700 if used by both spouses in the same occupation – 704.060.

Insurance

  • Matured life insurance benefits needed for support of unlimited value, or unmatured life insurance policy up to $12,200 – 704.100.
  • Disability or health insurance benefits – 704.130.
  • Homeowners’ insurance proceeds for six months after received, up to amount of homestead exemption -704.720.
  • Fidelity bonds – Cal. Labor Code § 404.
  • Life insurance proceeds if policy prohibits use to pay creditors – Cal. Insurance Code § 10132, 10170, 10171.

Miscellaneous

  • Business or professional licenses – 695.060.
  • Trust funds of inmates up to $1,525 – 704.090.
  • Property of business partnership – Cal. Corporations Code § 16501.

California Bankruptcy Exemption System 2

Wildcard

  • $1,350 plus any unused amount of burial or homestead exemption in any property (currently $26,925 in total if no homestead exemption is used) – 703.140(b)(5).

Homestead

Under System 2, California’s homestead exemption is $25,575 for real or personal property used as a residence – 703.140(b)(1).

Motor Vehicle

In System 2, you can exempt up to $5,100 of equity in your motor vehicles.

Personal Property

  • Burial plot up to $25,575 instead of homestead – 703.140(b)(1).
  • Clothing, household goods, appliances, furnishings, animals, books, musical instruments and crops up to $650 per item – 703.140(b)(3).
  • Jewelry up to $1,525 – 703.140(b)(4).
  • Health aids – 703.140(b)(9).
  • Wrongful death recoveries needed for support – 703.140(b)(11).
  • Personal injury recoveries up to $25,575 – 703.140(b)(11).

Retirement & Pensions

  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans) – 11 U.S.C. § 522.
  • IRAS and Roth IRAs up to $1,245,475 – 11 U.S.C. § 522(b)(3)(C)(n).
  • ERISA-qualified pension, annuities, and benefits necessary for support – 703.140(b)(10).

Public Benefits

  • Unemployment compensation, Social Security, Veterans’ benefits, and public assistance – 703.140(b)(10).
  • Crime victims’ reparation benefits – 703.140(b)(11).

Tools of Trade

  • Tools, books and implements of trade up to $7,625 – 703.140(b)(6).

Alimony & Child Support

  • Alimony and child support necessary for support – 703.140(b)(10).

Insurance

  • Unmatured life insurance policy, other than credit – 703.140(b)(7).
  • Unmatured life insurance accrued interest, dividends, loan, cash or surrender value up to $13,675 – 703.140(b)(8).
  • Disability benefits – 703.140(b)(10).
  • Life insurance proceeds needed for support – 703.140(b)(11).