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California Bankruptcy Exemptions: What You Can Keep

bankruptcy exemption.jpgWhen you file for a bankruptcy in California, you may exempt, or protect, some of your property from creditors. In a Chapter 7 bankruptcy, you are allowed to keep this property. In a Chapter 13 bankruptcy, exempt property will not be counted towards the value of your assets, which ultimately reduces your monthly payments to creditors.

There are two sets of exemptions allowed under California law. You must choose one or the other. The law describes types of property, such as your primary residence or your vehicle, that you are allowed to keep up to a certain dollar amount. The value amounts are adjusted upwards every three years by the Judicial Council of California and many of the figures can be found in its publication, Current Dollar Amounts of Exemptions From Enforcement of Judgments. Accordingly, many of the amounts listed in the California Code are now outdated.

Under the first set, the following includes some of the most popular exemptions (i.e., property which you may keep):

Homestead

  • $75,000 of home equity, if you are an unmarried, non-disabled homeowner;
  • $100,000 of home equity, if you are a married, non-disabled homeowner and at least one of the family members who lives with you does not have any ownership interest in the home (this is usually your child);
  • $175,000 of home equity, if you are disabled or over 65 years of age; and
  • $175,000 of home equity if you are over 55 years of age, unmarried, and earn less than $25,000 per year or if you are over 55 years of age, married, and earn less than $35,000 per year.

Personal Vehicle

  • $2,900 of equity in your vehicle.

    Other Personal Property

    • Household furnishings, appliances, provisions, wearing apparel, and other personal effects as long as they are ordinarily and reasonably necessary to you for your personal usage;
    • $3,050 of building materials for home improvement and repair;
    • $7,625 of jewelry, heirlooms, and artworks;
    • Health aids;
    • Social Security payments, unless they are commingled with your other money, in which case a single payee may keep only $3,050 and married couples may keep $4,575;
    • Any amount awarded by a court for personal injury or wrongful death cases that is necessary for your support; and
    • Your cemetery or burial plot, whatever its cost.

    Income

    • 75 percent of wages paid within 30 days prior to filing bankruptcy;
    • Tax exempt retirement accounts (401(k), SIMPLE IRA, etc.);
    • $1,245,475 of federal IRAs and Roth IRAs;
    • Public or private retirement benefits or plans;
    • Unemployment, disability, or union income;
    • Workers' compensation benefits;
    • Public assistance;
    • Student financial aid; and
    • Most insurance or annuity proceeds and benefits.

    Job Related

    • $7,625 of tools, materials, books, uniforms, instruments, one commercial vehicle, equipment, furnishings, etc. used for your job. You get to keep up to $15,250 if you and your spouse work together;
    • Business or professional licenses; and
    • Business partnership property.

    Under the second set, the following includes some of the more important differences:

    Homestead

    • $25,575 for any property used as your residence, including boats, motor homes, or similar types of personal property.

    Personal Vehicle

    • $5,100 of equity in your motor vehicle.

    Other Personal Property and Income

    • Up to $25,575 for a burial plot, if you choose not to use the homestead exemption
    • household furnishings, appliances, provisions, wearing apparel, and other personal effects up to $650 per item;
    • Up to $1,525 for jewelry;
    • Up to $25,575 for personal injury awards; and
    • ERISA pensions, annuities, and benefits necessary for support.

    Trade Tools

    • Up to $7,626 of trade tools, book, and other implements.

    Wildcard

    • $1,350 plus any used homestead exemption to be used wherever you want.

    If you are facing aggressive creditors, you should contact an experienced San Jose bankruptcy law attorney who can help protect your rights and your business. Call us (408) 971-6270 to schedule a consultation on your case.

    Source:

    http://www.courts.ca.gov/documents/ej156.pdf

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