Bankruptcy Exemptions in California

If you are filing bankruptcy in California, you are allowed to exempt certain categories of assets from liquidation. Certain states have opted out of the federal exemptions and have their own list of acceptable exemptions. The state exemptions can include various amounts of furniture, clothing, tools, pensions and homesteads.
The goal of the exemptions is to allow the individual to maintain certain assets that may be needed to make a fresh financial start after they declare bankruptcy.

Any property that is determined exempt will be outlined in you bankruptcy schedules which are filed with the bankruptcy court during the initial phase of the bankruptcy case. Creditors will have an opportunity to object to the exemptions at the meeting of the creditors. If there are no objections, the exempt property will no long be considered property of the bankruptcy estate.

Exemptions are one area of bankruptcy law which varies somewhat from state to set. Federal law outlines a set of exemptions in the bankruptcy code, but each state has the option to “opt out” of the federal exemptions and can provide their own state exemptions. Currently, sixteen states have the option to choose between the federal and states exemptions, the remainder of the states will have to use the state exemptions.

Prior to filing Bankruptcy in California, it is important to talk to a California Bankruptcy Attorney who can outline your current options for bankruptcy exemptions in the state of California.

California has two separate lists of exemptions. You must choose one.

Option 1:	Option 2:
Homestead	Homestead
Up to $50,000 in value for an individual (double if married) - Up to $75,000 in value for families (only if others living have no interest in homestead) - Up to $100,000 if single, 55 years of age or older, and earn less than $15,000 a year - Up to $100,000 if married and earn less than $20,000 a year and a creditor tries to force the sale of the home - Up to $125,000 if 65 or older, or physically or mentally disabled	Up to $20,725 in value. Unused portion of the homestead may be applied to any property
Personal Property	Personal Property
appliances, clothing and food Burial plot Bank deposits from Social Security Administration to $2000 ($3000 for husband and wife) building materials up to $2,000 to build/improve. Husband and wife can not double. jewelry and heirlooms up to $5,000. Husband’s and wife can not double. Motor vehicles to $1900, or $1900 in auto insurance if vehicle(s), lost, damaged or destroyed (husband and wife may not double) wrongful death causes of action or recoveries Personal injury recoveries	Household items up to $450 each item furnishings books clothing burial plot up to $7,500 (in place of homestead) health aids jewelry up to $1,150 motor vehicle up to $2,775 personal injury recoveries up to $7,500 (not including pain and suffering) wrongful death recoveries used for support
Insurance	Insurance
Disability or health benefits homeowner's insurance money for 6 months Life Insurance proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors No matured life insurance policy loan value to $8,000 (husband and wife may double	Disability benefits Health aids for debtor or dependent Life insurance proceeds needed for support of family Not matured life insurance contract accrued available to $9,300
Pensions	Pensions
County employees, police, peace officers, firemen Private retirements, including IRAs and Keoghs Public employees and retirement benefits	ERISA-qualified benefits needed for support
Public Benefits	Public Benefits
Financial aid to students Relocation benefits Unemployment benefits Union benefits due to labor dispute Worker’s compensation	Crime victim compensation public assistance social security unemployment compensation veterans' benefits
Tools of the Trade	Tools of the Trade
Up to $5,000 total. Tools can include: uniforms, books, furnishings, equipment, etc. double if used by both spouses are in the same occupation	Implements, books, and tools of trade up to $1,750
Wages	Wages
75% of wages paid within 30 days of filing Public employees: vacation credits (if getting them at least 75%)	None
Wildcard	Wildcard
None	$925 of any property. Plus unused portion of homestead or burial exemption, of any property.
Misc.	Misc.
Professional or business licenses Inmate’s tryst fund up to $1000 Property of business partnership Worker’s compensation	Alimony, child support needed for support

Federal supplemental exemptions may also be used in conjunction with the California state bankruptcy exemptions and are listed below. A California Bankruptcy Attorney should be consulted about exemptions prior to filing bankruptcy in California.

Asset	Description
Retirement Benefits	Civil Service Employees CIA employees Military honor roll pensions Foreign Service Employees Railroad Workers Social SecurityVeteran’s benefits Veteran’s Medal of Honor benefits
Survivor's benefits	Judges, United State Court Directors, Judicial Center Directors Supreme Court Chief Justices Administrators Light House Workers Military Service
Death and Disability Benefits	Government employees Longshoremen Harbor Workers War Risk Hazard Death and Injury Compensation
Miscellaneous	Military deposits in savings accounts while on permanent duty outside continental United States. Military Group Life Insurance Railroad Worker’s unemployment Insurance Seaman’s clothing Seaman’s wages while at see as per written contract Seventy-five percent of earned but not unpaid wages. The Bankruptcy Judge may authorize this for low income debtors.

Residency Requirements

The new 2005 Bankruptcy laws have updated the residency requirements if you are filing for bankruptcy. The rules were created to stop individuals from moving to a new state which has more liberal exemptions just to file bankruptcy. Under the 2005 bankruptcy law, you must have lived in the state for two years prior to filing bankruptcy in order to be eligible for the state’s exemptions. If you have not lived in a state for two years, then you will use the state’s exemptions where you lived for the longest period in the 180 days prior to filing bankruptcy. There are certain states, however that may not allowed you to use their exemptions if you do not currently live in their state. If no state exemptions are available to you, you can use the federal exemptions.

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