Breaking News Bankruptcy Exemptions Have Changed in California
As of April 1, 2016, as per the law, the Bankruptcy Exemptions are raised based on the 3 year cost-of-living change. Bankruptcy Exemptions are what the law lets you keep in a Bankruptcy for a “Fresh Start.” In California there are 2 sets of exemptions.
One set, the “703” exemptions, written up in the Code of Civil Procedure, Section 703, mirrors the Federal Bankruptcy Bankruptcy Exemptions. They are, in general, more Spartan than those of most states, but they offer a “Wild Card” exemption that covers almost anything left over up to the given amount.
The second set, the “704” exemptions, written up in the Code of Civil Procedure, Section 704, has somewhat more generous exemptions, particularly in regards to the Homestead Exemption. That exempts a given amount of equity (depending on marital status, disability, etc.) that can be protected in a home. Most states give you the option of using the Federal Bankruptcy Exemptions or the State Bankruptcy Exemptions. California simply adopted the Federal Exemptions as one set of available Exemptions.
However, you cannot mix 703 exemptions with 704 exemptions, any more than you can choose part of both “Dinner A” and “Dinner B” on a Chinese Menu. Unfortunately, the 704 Homestead Exemption is not subject to the every 3 years cost-of-living raise, so those are not featured here.
New Bankruptcy Exemptions
Code of Civil Procedure Section 703.140(b)
- Debtor’s aggregate interest in real property or personal property $26,800
- Debtor’s interest in one or more motor vehicles $ 5,350
- Debtor’s interest in household furnishings, goods, wearing apparel, etc. $ 675
- Debtor’s aggregate interest in jewelry $ 1,600
- “Wild Card” Debtor’s interest, in anything + any unused homestead exemption $ 1,425
- Debtor’s interest in implements, professional books or tools of the trade $ 8,000
- Debtor’s interest in accrued dividend or interest or loan value of insurance. $14,325
(11)(D) Debtor’s right to receive payment on account of personal bodily injury $26,800
Code of Civil Procedure Section 704.010 and following:
704.010 Motor vehicle(s) $ 3,050
704.030 Material for repair or maintenance of residence $ 3,200
704.040 Jewelry, heirlooms, art $ 8,000
704.060 Personal property used in Debtor’s or Spouse’s business or trade $ 8,000
704.060 Personal property used in Debtor’s and Spouse’s common business $15,975
704.080 Deposit account with direct payment of Social Security or Public Benefits:
Public benefits, one depositor is designated payee $ 1,600
Social Security benefits, one depositor is designated payee $ 3,200
Public benefits, 2 or more depositors as designated payees $ 2,375
Social Security benefits, 2 or more depositors as designated payees $ 4,800
704.090 Inmate trust account $ 1,600
Inmate trust account (restitution fine or order $ 300
704.100 Aggregate loan value of unmatured life insurance policies $12,800
Which Bankruptcy Exemptions Should I Use?
Many of these are confusing to the lay person. In fact, we have set out only the basic description of each exemption here to make it easier to understand. If you have questions contact Gary Fraley of Fraley & Fraley Sacramento Bankruptcy Attorneys at (916) 485-5444. Bankruptcy Exemptions are complex, don’t go it alone.