April 7, 2017

California is unique among the states in that it has two different sets of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy.

Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions – but California is not one of them. In California, you must use one of the state exemption systems below. Be sure to compare each set to see which works best in your situation. In addition to using either 703 or 704 exemptions (named for the code section in which they appear), you can also use any applicable amounts in the  federal nonbankruptcy exemptions.

To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see  Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?  

California Bankruptcy Exemptions -- Section 704

Unless otherwise noted, all law references are to the California Code of Civil Procedure.

Unless noted otherwise, if a couple is married and filing jointly and chooses to use System 1 exemptions, each spouse may claim the full amount of each exemption. This is informally called “doubling.”

Homestead

704.730 - Real or personal property occupied at time of filing for bankruptcy, including mobile home, boat, stock cooperative, community apartment, planned development or condominium, up to the following limits: $75,000 if single and not disabled; $100,000 if family and no other member has homestead; $175,000 if 65 or older or if physically or mentally disabled; $175,000 if creditors are seeking to force 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. Sale proceeds are exempt for up to 6 months after the  sale.

704.920 - Homestead declaration may be filed to protect the proceeds of a voluntary sale up to 6 months or to protect the exemption amount from a judicial lien.

Personal Property

704.010 - Motor vehicle or auto insurance if vehicle lost, destroyed or damaged up to $3,050 (spouses may not double).  

704.020 - Food, clothing, appliances and furnishings.

704.030 - Building materials to repair or improve home up to $3,200 (spouses may not double).

704.040 - Jewelry, heirlooms and art up to $8,000 total (spouses may not double).

704.050 - Health aids.

704.080 - Bank deposits from Social Security Administration up to $3,200 for a  single payee ($4,800 for husband and wife payees) and unlimited if funds are not commingled; Bank deposits from other public benefits up to $1,600 ($2,375 for husband and wife).

704.140 & 704.150 - Personal injury causes of action and wrongful death causes of action. Wrongful death and personal injury recoveries that are needed for support.

704.200 - Burial plot.

Fin. 17410 - Funds held in escrow.

Learn how to keep non-exempt property when filing bankruptcy.

Wages

704.070 - 75% of wages paid within 30 days prior to filing bankruptcy.

Pensions

11 U.S.C. § 522 -  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(b)(3)(C)(n) - IRAS and Roth IRAs to $1,283, 025.

704.110 - Public retirement benefits.

704.115 - Private retirements benefits, including IRA and Keogh.

Government 21255 - Public employees.

Government 31452 - County employees.

Government 31913 - County peace officers.

Government 32210 - County fire fighters.

Public Benefits

704.120 - Unemployment benefits and union benefits due to a labor dispute.

704.160 - Workers' compensation.

704.170 - Aid to blind, aged and disabled or other public assistance.

704.180 - Relocation benefits.

704.190 - Financial aid to students.

Tools of Trade

704.060 - Tools, implements, materials, books, uniforms, instruments, one commercial vehicle, equipment, and furnishings up to $8,000 total, or up to $15,975 if used by both spouses in the same occupation.  

Insurance

704.100 - Matured life insurance benefits needed for support of unlimited value, or unmatured life insurance policy up to $12,800 in value.

704.120 - Fraternal unemployment benefits.

704.130 - Disability or health benefits.

704.170 - Fraternal benefit society benefits.

Miscellaneous

695.060 - Business or professional licenses.

704.090 - Trust funds of inmates up to $1,600 (spouses may not double).

Corp. 16501 - Business partnership property.

Other

Add any applicable  Federal Nonbankruptcy Exemptions.

California Bankruptcy Exemptions -- Section 703

Unless otherwise noted, all law references are to the California Code of Civil Procedure.

Spouses may not double any of these exemption amounts.  

Special Note: California's  Bankruptcy-Only Exemption System

The exemptions in California's 703 series, along with those from seven other states, apply only in bankruptcy (which means you can’t use them against judgment creditors that try to take your property in other situations). Several courts have ruled that bankruptcy-only exemption schemes are unconstitutional. Although others have determined the opposite – that debtors may use these exemptions.

Although the majority of bankruptcy courts allow debtors to use bankruptcy-only exemption schemes, you may wish to consult with an attorney to determine what exemptions are permitted in your local bankruptcy court.  

Homestead

703.140(b)(1) Real or personal property, including co-op, used as a residence up to $26,800.

Personal Property

703.140(b)(1) - Burial plot up to $26,800, instead of homestead.

703.140(b)(2) - Motor vehicles up to $5,350.

703.140(b)(3) - Clothing, household goods, appliances, furnishings, animals, books, musical instruments and crops up to $6 p75er item.

703.140(b)(4) - Jewelry up to $1,600.

703.140(b)(9) - Health aids.

703.140(b)(11) - Wrongful death recoveries needed for support.

703.140(b) (11) - Personal injury recoveries up to $26,800.

Pensions

11 U.S.C. § 522 -  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(b)(3)(C)(n) - IRAS and Roth IRAs to a certain amount. (This amount is set by federal law.)

703.140(b)(10) - ERISA-qualified benefits needed for support.

Public Benefits

703.140(b)(10) - Unemployment compensation, Social Security, Veterans' benefits, and public assistance.

703.140 (b) (11) - Crime victims' compensation.

Tools of Trade

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

Alimony & Child Support    

703.140(b)(10) - Alimony and child support needed for support.

Insurance

703.140(b)(7) - Unmatured life insurance policy, other than credit.

703.140(b)(8) - Unmatured life insurance contract accrued interest, dividends, loan, cash or surrender value up to $14,325.

703.140(b)(10) - Disability benefits.

703.140(b)(11) - Life insurance proceeds needed for support.

Wildcard

703.140(b)(5) - $1,425 of any property plus any unused amount of burial or homestead exemption for use on any property of the filer's choosing.

Other

Add any applicable Federal Nonbankruptcy Exemptions.

Confirming Exemptions

These lists include  the majority of bankruptcy exemptions available in California. However, they may not include all exemptions, and states often create exceptions to specific exemptions. In addition, California might have changed the amounts since this list was last updated.

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