California Bankruptcy Exemptions — Asset Protection
Understand which assets you can protect when filing for Chapter 7 or Chapter 13 bankruptcy in California under Section 704 and Section 703 exemptions.
How Asset Protection Works in California Bankruptcy
Asset protection as it pertains to bankruptcy revolves around the assets that you are allowed to keep. The assets you keep in bankruptcy will depend on which state exemptions you qualify for. For example, if you have resided in California for 2-years before filing, you will use California exemptions. Below is an explanation of some of the protections under the California exemptions:
You can choose from one of the following protections: Section 704 or Section 703.
California Bankruptcy Exemptions — Section 704 Protection
- Home (Homestead Exemption) — Allows you to protect up to $743,459 in equity in a home. The amount of equity that you can protect is based on the median sales prices of single-family homes in your county for the previous year.
- Vehicle — Allows you to protect up to $8,625 in the value of any number of vehicles.
- Jewelry — Allows you to protect jewelry, heirlooms and works of art up to $10,950.
- Household Goods — Household furnishings, clothes, and appliances that are reasonably necessary.
- Tools of the Trade — Up to $10,950.
- Deposit Account Funds — Up to $2,170 (increased to $4,340 for joint filing).
- Life Insurance — Loan value up to $35,050.
California Bankruptcy Exemptions — Section 703 Protection
- Homestead Exemption — Allows you to protect up to $36,750 in equity, in any home you live in.
- Wildcard Exemption — Up to $1,950 in any property you own, plus you can use any unused portion of the homestead protection as a wildcard. This means that if you have no home or equity in your home, you can use the $36,750 from the homestead to protect any asset or property you own. Your total wildcard can equal $38,700, where there is no equity in your home, or you do not own a home.
- Household Goods and Furnishings — You are allowed to protect and keep any item of household goods, clothes, furniture not exceeding $925 in value in any particular item.
- Jewelry — You are allowed to protect up to $2,175 in jewelry value.
- Motor Vehicle — You are allowed to protect and keep up to $8,625 in one or more vehicles. Where your vehicle is worth more than $8,625, you can many times use your wildcard protection to protect the remainder of the vehicle value.
- Life Insurance — Loan value up to $19,625.
- Personal Injury Payments — Up to $36,750.
Meet Your Bankruptcy Attorney — Norma Duenas
The founder of Southern California Law Advocates (SCLA), Orange County bankruptcy attorney Norma Duenas, is an experienced bankruptcy attorney who graduated from the University of San Diego Law School, Cum Laude. Ms. Duenas has handled hundreds and hundreds of Chapter 7 and Chapter 13 bankruptcy cases — simple and complex.
Attorney Norma Duenas will make time to sit down with you personally if you call and schedule a free and confidential consultation.
If you need further assistance or to schedule a free phone or in-person consultation, please call us at (866) 337-7220 or email us if calling us is not practical or it’s after hours.
Need Help Understanding Your Bankruptcy Exemptions?
Schedule a free consultation with an experienced California bankruptcy attorney who can help you determine which exemption set protects your assets best.
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Frequently Asked Questions About California Bankruptcy Exemptions
What are California bankruptcy exemptions?
California bankruptcy exemptions are legal protections that allow you to keep certain assets when filing for Chapter 7 or Chapter 13 bankruptcy. California offers two sets of exemptions — Section 704 and Section 703 — and you must choose one set when filing. The set you choose depends on your specific financial situation, including whether you own a home and how much equity you have.
What is the California homestead exemption under Section 704?
Under Section 704, you can protect up to $743,459 in equity in your home. The exact amount of equity you can protect is based on the median sales prices of single-family homes in your county for the previous year.
What is the wildcard exemption under Section 703?
Under Section 703, the wildcard exemption allows you to protect up to $1,950 in any property you own, plus any unused portion of the $36,750 homestead exemption. If you have no home or no equity in your home, your total wildcard can equal $38,700, which can be applied to protect any asset or property you own.
Which California bankruptcy exemption set should I choose — Section 704 or 703?
Section 704 is generally better if you own a home with significant equity because of the higher homestead exemption of up to $743,459. Section 703 is often better for those who do not own a home or have little equity, because of the flexible wildcard exemption that can protect up to $38,700 in any property. A bankruptcy attorney can help you determine which set is best for your situation.
How do I qualify to use California bankruptcy exemptions?
To use California bankruptcy exemptions, you must have resided in California for at least 2 years (730 days) before filing for bankruptcy. If you have not lived in California for 2 years, you may need to use the exemptions from your previous state of residence.
Can I get a free consultation about California bankruptcy exemptions?
Yes. Attorney Norma Duenas at Southern California Law Advocates offers free and confidential consultations. Call (866) 337-7220 or email the office to schedule a free phone or in-person consultation.