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. At Price Law Group,
our experienced bankruptcy attorneys can guide you. Contact us today for an
initial free, confidential consultation regarding your situation today.
California has two separate lists of exemptions. You must choose one.
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Option 1:
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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%)
|
|
| Wildcard |
Wildcard |
|
|
-
- $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.
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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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