California Bankruptcy Exemption Laws

California Bankruptcy

California Bankruptcy Exemption Laws

CA Bankruptcy InformationCalifornia Bankruptcy Exemption Laws

(Portions reprinted by permission from How to File for Chapter 7 Bankruptcy, Nolo © 1989-2018 )


California Exemptions Summary

(details below...)

Federal Exemptions NOT Available
in California (see below)

Homestead

Real or personal property you occupy including mobile home, boat, stock cooperative, community apartment, planned development, or condo to $75,000 if single & not disabled; $100,000 for families if no other member has a homestead (if only one spouse files, may exempt one-half of amount if home held as community property and all of amount if home held as tenants in common); $175,000 if 65 or older, or physically or mentally disabled; $175,000 if 55 or older, single, & gross annual income under $25,000 or married & gross annual income under $35,000 & creditors seek to force the sale of your home; forced sale proceeds received exempt for 6 months after; separated but married debtor may claim homestead in community property still occupied by other spouse. (Husband & wife may not double)  (more...)

Auto/Truck (aka Motor Vehicle)

Motor vehicles to $3,050, or $3,050 in auto insurance for loss or damages (husband and wife may not double)   (more...)

Personal Property

Jewelry, heirlooms & art to $8,000 total (husband and wife may not double)Health aids
Building materials to repair or improve home to $3,200 (husband and wife may not double)
Tools, implements, materials, instruments, uniforms, books, furnishings, & equipment to $8,000 total ($14,975 total if used by both spouses in same occupation); amount of exemption for commercial motor vehicle not to exceed $4,850 ($9,700 if used by debtor and spouse in same trade)    (more...)

Wild Card

None (use federal non-bankruptcy wage exemption)   (more...)

Wage Garnishment Law

Minimum 75% of wages paid within 30 days prior to filing   (more...)

More California Exemptions...

[Click here for more info & citations...]

Dislcaimer

Disclaimer

Citations and links to primary law and secondary sources are provided for those who wish to do further research. Every effort has been made to make this information up to date and accurate, but laws can and do change without notice. Persons relying on this information are responsible for confirming its timeliness and accuracy before relying on it. (This information was updated in December 2014.)

Also bear in mind that these brief summaries do not list every detail or exception to these exemptions. For example, there are often exceptions for collection of child support debt and/or taxes. These listings are designed to inform you of laws that exist for your benefit, so that you may exercise what rights you may have.

Finally, this website is intended to provide information only. It cannot answer whether your property does or does not qualify for a specific exemption.

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California Homestead | Insurance | Retirement | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

California Exemptions

Federal vs. State Exemption Statutes and How to Read Them

Some states offer you a choice of their State law exemptions or the Federal bankruptcy exemptions.

Other states require you to use their state exemptions.

Some states have special exemptions that apply specifically to bankruptcy, while others apply exemption laws that affect any kind of court-ordered collection activity.

As such, the wording of these statutes commonly speak in terms used in court-ordered procedures such wages not being subject to or "garnishment" or of property or pension funds not being subject to "attachment" ...they're not talking sentimental attachment... they mean liens -- that are "attached" to property -- and sometimes can be "stripped" away or "avoided" (i.e. eliminated) in bankruptcy.

Also, unlike what you see on this web page, most states don't list their exemptions in a neat little table.

What appears on this page is a rather simplified summary of exemption laws to let you know what laws are out there and where to find them.

Users should check the actual citations for specific limitations or qualifications or updates of these exemptions.

One more thing... Some states change the exemption amounts by adminstrative order, so the numbers in the statute are old, and don't match current amounts, which you'll see here.

In states where that is the case, I make a note of that.

A few courts offer a simplified list of current exemptions and their amounts, but most don't. Wouldn't hurt to ask the clerk.

 

Federal Bankruptcy Code Exemptions Not Available in California

Although the federal bankruptcy code provides a list of exemptions, these exemptions are not available in California. California law requires you to use the exemptions found in state law -- not the U.S. bankruptcy code.

Federal "non-bankruptcy" exemptions are available

However you are entitled to use so-called federal "non-bankruptcy" exemptions in addition to your state law exemptions. Non-bankruptcy exemptions are those found provisions of U.S. law that are not part of the bankruptcy code.

The four most significant non-bankruptcy exemptions are for

  • Wages (a general cap on what percentage of your wages can be garnished),
  • Social Security benefits,
  • Civil Service benefits,
  • Veterans Benefits

Other so called "non-bankruptcy" exemptions mostly deal with various benefits to government and military personnel, with a few odd laws regarding specially-regulated labor markets such as railroad workers, seamen, and longshoremen.

Special Notes regarding California exemptions:

Federal Bankruptcy Exemptions not available. California has two systems; you must select one or the other. Most law references are to the California Code of Civil Procedure. Many exemptions do not apply to claims for child support.

Joint filers cannot double California exemptions. Unlike most states, under California law, joint filers may not double exemptions with specific dollar limitations unless clearly stated otherwise in the exemption law. Code Civ. Pro. 703.110 ("Where the property exempt under a particular exemption is limited to a specified maximum dollar amount, unless the exemption provision specifically provides otherwise, the two spouses together are entitled to one exemption limited to the specified maximum dollar amount, whether one or both of the spouses are judgment debtors under the judgment and whether the property sought to be applied to the satisfaction of the judgment is separate or community.")

Note: California's exemption amounts are no longer updated in the statutes themselves. California Code of Civil Procedure section 703.150 deputizes the California judicial council to update the exemption amounts every three years. (The last revision was in 2016; the next will be 2019.) As a result, the amounts listed in this chart (from the 2016 revisions) may not match the amounts that appear in the cited statutes. The current exemption amounts can be found on the California Judicial Council Website. http://www.courtinfo.ca.gov/forms/documents/ej156.pdf

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

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California Homestead Exemption

Home Valuation tools

Zillow.com Recommended! Wonderful tool that shows home values in your neighborhood. This link will take you to a listing of the average home value in your zip code. Just add your street address to get an estimate of the value of your house, and all others in your neighborhood. (Note: Does not serve all areas, and valuations are imperfect estimates only.)

Yahoo Real Estate offers comparable home sales in your neighborhood.

Almost every state provides protection for equity in the family home, and many states have increased the amount of protection in recent years. Seven states offer unlimited protection. Most states are not as generous.

New Federal Residency Requirement

Under the new bankruptcy law, you must be have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $160,375. (If your state's exemption offers less than this amount, the law is irrelevant to you.) The law is poorly worded but seems to say that if you move from one home to another in the same state, you can claim that state's homestead protection.

IF you are moving to another state, OR you moved to California within in the last two years, click here.

California System 2 Exemptions

  • Real or personal property, including co-op, used as residence to $26,800; unused portion of homestead may be applied to any property
    Cal. Civ. Proc. Code 703.140 (b)(1)
    In re Talmadge, 832 F.2d 1120 (9th Cir 1987)

California System 1 Exemptions

  • CA Exemptions
  • May file homestead declaration to protect exemption amount from attachment of judicial liens and to protect proceeds of voluntary sale for 6 months.
    Cal. Civ. Proc. Code 704.920 (allows declaration of homestead)
    Cal. Civ. Proc. Code 704.950 (judgment liens cannot attach)
    Cal. Civ. Proc. Code 704.960 (exemption from voluntary sale proceeds)
  • Real or personal property you occupy including mobile home, boat, stock cooperative, community apartment, planned development, or condo to $75,000 if single & not disabled; $100,000 for families if no other member has a homestead (if only one spouse files, may exempt one-half of amount if home held as community property and all of amount if home held as tenants in common); $175,000 if 65 or older, or physically or mentally disabled; $175,000 if 55 or older, single, & with gross annual income under $25,000 or married & gross annual income under $35,000 & creditors seek to force the sale of your home; forced sale proceeds received exempt for 6 months after; separated but married debtor may claim homestead in community property still occupied by other spouse. (Husband & wife may not double)
    Cal. Civ. Proc. Code 704.710 (definition - automatic homestead)
    Cal. Civ. Proc. Code 704.720
    Cal. Civ. Proc. Code 704.730
    In re McFall, 112 B.R. 336 (9th Cir. B.A.P. 1990)
    Cal. Civ. Proc. Code 703.150 (c) (Adjustment of Exemption Amounts)

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


California Insurance exemptions

Virtually all states protect life insurance proceeds in some manner or another. Some restrict it to proceeds paid to a dependent. Many states also protect the cash-value or loan-value of insurance policies.

If a substantial amount of your assets are in life insurance, you may want to consult a professional to determine the extent to which those policies are exempt. The website AssetProtectionBook.com does particularly thorough job of covering California insurance exemptions.

California System 2 Exemptions

California System 1 Exemptions

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Miscellaneous other exemptions for California

This category covers items like partnership property, alimony & support payments.

California System 2 Exemptions

California System 1 Exemptions

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


California Pensions & Retirement Savings Exemptions

The new federal bankruptcy law now automatically exempts a virtually all tax-exempt pensions and retirement savings accounts from bankruptcy, even if you are using state law exemptions. 11 U.S.C. § 522(b)(3)(C). (See Help Topic: Special Rules For Retirement Accounts.)

The law protects up to $1,283,025 of any pension or retirement fund that qualifies for special tax treatment under Internal Revenue Code sections 401, 402, 403, 408, 408A, 414, 457, or 501(a).

California System 2 Exemptions

California System 1 Exemptions

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

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California Personal Property Exemptions

Auto Valuation Tools:

Kelley Blue Book

Edmunds

Both of these websites offer interactive tools to determine the current value of your used car.

This category covers your car, your non-retirement bank accounts, and most of your other personal possessions, other than your house.

States vary widely on how generous they are in this area. Some exemptions may be for any combination of property up to an aggregate amount. Other exemptions apply only to specific items, such as jewelry.

Remember that an exemption will not protect your car from being repossessed by the holder of the car loan you used to purchase the vehicle if you pledged the vehicle as security for the loan. To keep the car, you will have to pursue other options such as 'redemption' or 'reaffirmation.' See the help topics and How to File for Chapter 7 Bankruptcy for more on this.

California System 2 Exemptions

California System 1 Exemptions

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


California Public Benefits Exemptions

Most states exempt public benefits, consistent with the notion that such benefits are intended as a safety net for the recipient.

California System 2 Exemptions

California System 1 Exemptions

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


California Tools of Trade Exemptions

These are the things you use to make a living. An automobile or truck can be a tool of trade if you use it as such. Commuting to work doesn't count, but if driving is a necessary component of transacting your business, you can claim your vehicle is a tool of trade.

California System 2 Exemptions

California System 1 Exemptions

  • Commercial vehicle (Vehicle Code 260) to $4,850 ($9,700 total if used by both spouses in same occupation)
    Cal. Civ. Proc. Code 704.060
  • Tools, implements, materials, instruments, uniforms, books, furnishings, & equipment to $8,000 total ($15,975 total if used by both spouses in same occupation);
    Commercial motor vehicle to $4,850 ($9,700 if used by debtor and spouse in same trade)
    Cal. Civ. Proc. Code 704.060

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

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California Wage Garnishment Laws

Most states have a wage garnishment law. In some states, wage garnishment laws can be used in bankruptcy as an exemption to protect income that you had coming due, but not yet received, as of the day you filed, for work you had already done -- so called "earned but unpaid wages".

In some states, the wage garnishment law protects not only wages owed to you, but also wages already in your possession and saved over time preferably holding it in a separate bank account. In other states wage garnishment laws do not protect wages once they are they are in your possession.

There is a federal wage garnishment protection found in the CCPA (Consumer Credit Protection Act), 15 U.S.C. § 1673, which limits how much of your pay can be taken for collection purposes. But this law law is generally found not to be an exemptions in bankrupty. See, e.g. IN RE HORTON, Case No. 10-53495., Bankr. ED Kentucky, 3/4/2011

Some courts have also held that some state wage garnishment laws do not create an exemption in bankruptcy. See, eg. Utah, Tennessee, Vermont, Missouri.

Other courts have held that state garnishment statutes DO create an exemption. See, e.g., Oregon, Iowa, Ohio, Kansas, Indiana.

And in Illinois there are recent published bankruptcy court opinions going both ways on the issue of whether Illinios wage garnishment law can be used as an exemption in bankruptcy.

Click here for collected case law on the question: Do wage garnishment laws create an exemption in bankruptcy?

Finally, if you live in a state that lets you use the Federal bankruptcy exemptions in 522(d), and you choose to use them, then you get no exemption for earned but unpaid wages; the wildcard exemption is your only option. See, e.g. U.S. v. Christensen, 200 B.R. 869 (D.S.D. 1996) (applying FDCPA law, based on similar statutory structure to bankruptcy's opt-out law)

California System 2 Exemptions

California System 1 Exemptions

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California Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


California Wild Card Exemption

Most, but not all, states allow a so-called "wild-card" exemption that can apply to any property. The wild card exemption can be of particular help if one or more of your other exemptions falls short of protecting your equity. You may split your wild card exemption amount over multiple items and stack it atop other exemptions as needed to protect exposed equity.

California System 2 Exemptions

California System 1 Exemptions


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