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California Bankruptcy Exemptions Systems

Protecting Your Property Under California Law

This California bankruptcy exemptions table has been updated pursuant to the revisions published by the Judicial Council of the Administrative Office of the Courts of California. California bankruptcy exemption amounts get adjusted periodically to account for inflation. These bankruptcy exemptions were last updated by the California Judicial Council to adjust for inflation on April 1, 2016.

This information is not intended to be legal advice and is only to show the differences in the systems. WARNING: Laws and regulations are subject to change. As a result, the accuracy of this exemption list is not guaranteed. Check the specific California Code Sections for any changes.

ASSET CALIFORNIA BANKRUPTCY EXEMPTIONS UNDER CCP §704
California – System 1 (updates effective 4/1/2016)		 CALIFORNIA BANKRUPTCY EXEMPTIONS UNDER CCP §703.140 California – System 2 (effective 4/1/2016)
Homestead (Subject to residency requirement)
Real or personal property you occupy including mobile home, boat, stock cooperative, community apartment, planned development or condo to $75,000 if single and 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 the 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 & earn under $25,000 or married & earn under $35,000		 Real or personal property, including co-op, used as residence to $28,800; unused part of homestead may be applied to any property.See Wild Card Below.
Insurance
  • Disability or health benefits
  • Fidelity bonds
  • Fraternal unemployment benefits
  • Homeowners’ insurance proceeds for 6 months after received, to Homestead Exemption amount
  • Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors
  • Matured life insurance benefits needed for support
  • Unmatured life insurance policy loan value to $12,200 (husband and wife may double)
  • Disability benefits
  • Life insurance proceeds needed for support of family
  • Cash or loan value of unmatured life insurance contract accrued to $14,325
  • Unmatured life insurance policy other than credit
Misc.
  • Business or professional licenses, except liquor licenses (708.630)
  • Inmates’ trust funds to $1,525 (husband and wife may double)
  • Property of business partnership
 Alimony, Child Support needed for support
Pensions
  • County employees
  • County firefighters
  • County peace officers
  • Private retirement benefits, including IRAs & Keoghs
  • Public employees
  • Public retirement benefits
 ERISA-qualified benefits needed for support
Personal Property
  • Appliances, furnishings, clothing and food needed
  • Bank deposits from Social Security Administration to $2,875; $4,300 for husband and wife
  • Building materials to $3,050 to repair or improve home
  • Burial plot
  • Health aids
  • Jewelry, heirlooms & art to $7,175
  • Motor vehicle to $2,900, or $2,900 in auto insurance if vehicle(s) is lost, damaged or destroyed
  • Personal injury causes of action
  • Personal injury recoveries needed for support; if receiving installments, at least 75%
  • Wrongful death causes of action
  • Wrongful death recoveries needed for support; if receiving installments, at least 75%
  • Animals, crops, appliances, furnishings, household goods, books, musical instruments & clothing to $675 per item
  • Burial plot to $25,575, in lieu of Homestead
  • Health aids
  • Jewelry to $1,600
  • One or more motor vehicles to $5,350
  • Personal injury recovery to $25,575 (not excluding pain and suffering or pecuniary loss)
  • Wrongful death recoveries needed for support
  • Payment for loss of future earnings
Public Benefits
  • Social Security Benefits
  • Social Security Deposit account Bal. $3,050-$4,575
  • Public Benefits
  • Public Benefits Deposit Account Bal. $1,525-$2,275
  • Aid to blind, aged, disabled, AFDC
  • Financial Aid to students
  • Relocation benefits
  • Unemployment benefits
  • Union benefits due to labor dispute
  • Workers’ Compensation
  • Crime victims’ compensation
  • Public Assistance
  • Social Security Unemployment compensation
  • Veterans’ benefits
Tools of Trade Tools, implements, materials, instruments, uniforms, books, furnishings, equipment, vessel, one commercial motor vehicle (max. $4,850 or $9,700 with joint occupation) up to $7625 individually or $15,250 if used by both spouses in same occupation (cannot claim motor vehicle under Tools of Trade Exemption if claimed under Motor Vehicle Exemption) Implements, books and tools of trade to $8,000
Wages
  • Public employees’ vacation credits; if receiving installments, at least 75%
  • 75% of wages paid within 30 days of filing for bankruptcy
 None
Wild Card None $1,425 of any personal property plus any unused portion of Homestead Exemption, to be partially or wholly applied to any other property (total maximum Wild Card available – $28.225).

 

California Bankruptcy Exemptions System 1

Unless otherwise noted, all law references are to the California Code of Civil Procedure. These exemptions were last updated by the California Judicial Council to adjust for inflation on April 1, 2016. The next update will be April 1, 2019.

Homestead

The homestead exemption protects a certain amount of equity in your principal residence. In System 1, you can exempt real or personal property you live in at the time of filing for bankruptcy, including a mobile home, boat, stock cooperative, community apartment, planned development or condominium, up to:

  • $75,000 if single and not disabled; $100,000 if family and at least one family member has no interest in the homestead;
  • $175,000 if 65 or older or if physically or mentally disabled;
  • $175,000 if creditors are seeking to force the sale of your home and you are either (a) 55 or older, single and earn under $25,000 per year, or (b) 55 or older, married and earn under $35,000 per year – 704.730.

Motor Vehicle

The motor vehicle exemption is designed to protect a certain amount of equity in your car, truck, motorcycle, or other vehicle. Under System 1, your motor vehicle exemption is $2,900 – 704.010.

Personal Property

  • Household items and personal effects – 704.020.
  • Residential building materials to repair or improve home up to $3,050 – 704.030.
  • Jewelry, heirlooms and works of art up to $7,625 – 704.040.
  • Health aids – 704.050.
  • Bank deposits arising out of Social Security payments up to $3,050 for a single payee ($4,575 for husband and wife payees) and unlimited if funds are not commingled; bank deposits from other public benefit payments up to $1,525 ($2,275 for husband and wife as joint payees) – 704.080.
  • Personal injury and wrongful death causes of action and recoveries that are necessary for support – 704.140 & 704.150.
  • Cemetery and burial plot – 704.200.

Wages

  • 75% of wages paid within 30 days prior to filing bankruptcy – 704.070.
  • Public employee vacation credits (at least 75% if receiving installment payments) – 704.113.

Retirement and Pensions

  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans) – 11 U.S.C. § 522.
  • IRAS and Roth IRAs to $1,245,475 – 11 U.S.C. § 522(b)(3)(C)(n). This amount is set by Federal Law.
  • Public retirement benefits – 704.110.
  • Private retirement plans and benefits, including IRA and Keogh – 704.115.
  • Public employees – Cal. Gov’t Code § 21255.
  • County employees – Cal. Gov’t Code § 31452.
  • County peace officers – Cal. Gov’t Code § 31913.
  • County fire fighters – Cal. Gov’t Code § 32210.

Public Benefits

  • Unemployment and disability benefits, and union benefits due to labor disputes – 704.120.
  • Workers’ compensation benefits – 704.160.
  • Public assistance benefits – 704.170.
  • Relocation benefits – 704.180.
  • Student financial aid – 704.190.

Tools of Trade

  • Tools, implements, materials, books, uniforms, instruments, one commercial vehicle, equipment, and furnishings up to $7,625 total, or up to $15,250 if used by both spouses in the same occupation. Commercial vehicle up to $4,850, or $9,700 if used by both spouses in the same occupation – 704.060.

Insurance

  • Matured life insurance benefits needed for support of unlimited value, or unmatured life insurance policy up to $12,200 – 704.100.
  • Disability or health insurance benefits – 704.130.
  • Homeowners insurance proceeds for six months after received, up to amount of homestead exemption -704.720.
  • Fidelity bonds – Cal. Labor Code § 404.
  • Life insurance proceeds if policy prohibits use to pay creditors – Cal. Insurance Code § 10132, 10170, 10171.

Miscellaneous

  • Business or professional licenses – 695.060.
  • Trust funds of inmates up to $1,525 – 704.090.
  • Property of business partnership – Cal. Corporations Code § 16501.

California Bankruptcy Exemption System 2


California’s System 2 exemptions only apply in bankruptcy (they can’t be used to protect your property against creditors outside of bankruptcy). Certain courts have deemed bankruptcy-only exemption systems to be unconstitutional while others allow debtors to use them. This means that some courts (especially if you are filing for bankruptcy outside of California but are still using California exemptions because of domicile rules) may not allow you to use the System 2 exemptions. As a result, consider talking to a knowledgeable bankruptcy attorney to decide which exemptions are permitted in your area.

Unless otherwise noted, all law references are to the California Code of Civil Procedure. These exemptions were last updated by the California Judicial Council to adjust for inflation on April 1, 2013. The next update will be April 1, 2016.

Homestead

Under System 2, California’s homestead exemption is $26,800 for real or personal property used as a residence – 703.140(b)(1).

Motor Vehicle

In System 2, you can exempt up to $5,350 of equity in your motor vehicles.

Personal Property

  • Burial plot up to $28,800 instead of homestead – 703.140(b)(1).
  • Clothing, household goods, appliances, furnishings, animals, books, musical instruments and crops up to $675 per item – 703.140(b)(3).
  • Jewelry up to $1,600 – 703.140(b)(4).
  • Health aids – 703.140(b)(9).
  • Wrongful death recoveries needed for support – 703.140(b)(11).
  • Personal injury recoveries up to $26,800 – 703.140(b)(11).

Retirement and Pensions

  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans) – 11 U.S.C. § 522.
  • IRAS and Roth IRAs up to $1,245,475 – 11 U.S.C. § 522(b)(3)(C)(n).
  • ERISA-qualified pension, annuities, and benefits necessary for support – 703.140(b)(10).

Public Benefits

  • Unemployment compensation, Social Security, Veterans’ benefits, and public assistance – 703.140(b)(10).
  • Crime victims’ reparation benefits – 703.140(b)(11).

Tools of Trade

  • Tools, books and implements of trade up to $8,000 – 703.140(b)(6).

Alimony and Child Support

  • Alimony and child support necessary for support – 703.140(b)(10).

Insurance

  • Unmatured life insurance policy, other than credit – 703.140(b)(7).
  • Unmatured life insurance accrued interest, dividends, loan, cash or surrender value up to $14,325 – 703.140(b)(8).
  • Disability benefits – 703.140(b)(10).
  • Life insurance proceeds needed for support – 703.140(b)(11).

Wildcard

  • $1,425 plus any unused amount of burial or homestead exemption in any property (currently $28,225 in total if no homestead exemption is used) – 703.140(b)(5).