California Bankruptcy Exemptions

You'll protect property in a California bankruptcy using the California bankruptcy exemption laws.

By , Attorney · University of the Pacific McGeorge School of Law

California bankruptcy exemption laws protect property in bankruptcy and are essential to a fresh start. When you file, the California bankruptcy exemptions will let you keep what you need to work and live. However, exemptions protect essential assets only, not unnecessary luxury goods.

To prevent a costly property loss, you'll want to understand the exemptions available under California, and what happens to property you can't protect with an exemption. In this article, you'll also learn whether you've lived in California long enough to use California bankruptcy exemptions.

Using Exemptions When Filing Bankruptcy in California

Bankruptcy is a federal process that works the same in every state. However, you'll use California state law to protect your property. Although most states don't allow filers to choose bankruptcy exemptions, California filers are fortunate because the state offers two choices—you'll find both below. You'll want to review each list carefully and compare it to the property you own because you can't use exemptions from both lists. You can also use the federal nonbankruptcy exemptions along with the state sets.

Choosing an Exemption List in a California Bankruptcy

To help you make an informed choice, we've charted both California exemption sets and explained the essential differences. You'll also find links that will take you to the California statutes and a list of available federal nonbankruptcy exemptions.

Our California Bankruptcy Exemption Analysis

California's 703 exemptions work best for people who don't own a home or have little to no home equity. Not only can most people protect all household basics, but this exemption set provides a generous wildcard exemption you can use to protect anything of your choosing, including luxury items not usually covered in bankruptcy. For instance, if you own an expensive car outright, have banked a nest egg, or have a valuable collection but don't own much else, you'll likely lean toward the 703 exemptions.

By contrast, California's 704 exemptions protect a significant amount of home equity, all household basics, personal injury actions, and equipment needed in a family business. In exchange, filers can't keep luxury items like a boat, RV, or fancy car. But the jewelry, heirlooms, and art exemptions are very generous.

Exemption caution. The state exemptions below aren't being updated and could have changed since the last update. Federal exemption amounts are current through March 31, 2025. Also, our California bankruptcy exemption analysis is for illustration purposes only and won't apply in all cases. A bankruptcy lawyer will have current information and be in the best position to help you protect your assets in bankruptcy.

California 703 Bankruptcy Exemptions

Amounts will adjust on April 1, 2025. Spouses cannot double exemptions.

California 704 Bankruptcy Exemptions

Amounts will adjust on April 1, 2025. Spouses cannot double exemptions unless noted.

Homestead Exemption

  • $31,950 for real or personal property used as a residence
  • can be used for a burial plot

CCP § 703.140(b)(1)

  • $600,000 for real or personal property filer occupies
  • can apply to a mobile home, boat, stock cooperative, community apartment, planned development, or condominium

CCP § 704.730

Motor Vehicle Exemption

  • $6,375

CCP § 703.140(b)(2)

  • $3,625

CCP § 704.010

Tools of the Trade Exemption

  • $9,525

CCP § 703.140(b)(6)

  • $9,525
  • additional $9,525 for spouse in the same business
  • $4,850 of the exemption amount can be applied to a commercial vehicle

CCP § 704.060

Wildcard Exemption

  • $1,700, and
  • any unused homestead exemption amount ($31,950 available if homestead exemption isn't used)

CCP § 703.140(b)(5)

  • none

Personal Property Exemptions

  • $800 per item for clothing, household goods, appliances, furnishings, animals, books, musical instruments, and crops
  • $1,900 in jewelry
  • health aids
  • wrongful death recovery needed for support
  • $31,950 personal injury recovery
  • Alimony and child support needed for support

CCP §§ 703.140(b)(3),(4),(9) - (11)

  • food, clothing, appliances, and furnishings
  • $3,825 in building materials to repair or improve home
  • $9,525 in jewelry, heirlooms, and art
  • health aids
  • $1,826 in a bank account (spouses can double; amount valid as of July 1, 202, and adjusts yearly)
  • all Social Security payments if not commingled with other funds; otherwise, $3,825 ($5,725 joint payees)
  • all other public benefit payments if not commingled with other funds; otherwise, $1,900 ($2,825 joint payees)
  • personal injury and wrongful death causes of action
  • personal injury and wrongful death recoveries needed for support
  • burial plot
  • 75% of wages paid within 30 days before bankruptcy filing
  • $1900 inmate trust account
  • public employee vacation credits
  • FEMA benefits

CCP §§ 704.020 - 704.050; 704.070; 704.080; 704.090; 704.113; 704.140; 704.150; 704.200; 704.230

Retirement Account Exemptions

  • individual retirement account
  • pension, profit-sharing, stock bonus, or another ERISA-qualified plan
  • traditional, SIMPLE, or Roth IRA
  • more protections in "Federal Nonbankruptcy Exemptions" below

  • private retirement benefits, including IRAs and Keoghs
  • public retirement benefits
  • more protections in "Federal Nonbankruptcy Exemptions" below

CCP §§ 704.010; 704.115

Public Benefit Exemptions

  • unemployment compensation, Social Security, Veterans' benefits, and public assistance
  • crime victims' reparation benefits

CCP §§ 703.140(b)(10),(11)

  • public assistance
  • student financial aid
  • relocation benefits
  • unemployment benefits
  • union labor dispute benefits
  • workers' compensation

CCP §§ 704.105; 704.120; 704.160 - 704.190

Insurance Benefit Exemptions

  • unmatured life insurance policy
  • $17,075 interest and dividends in an unmatured life insurance contract
  • disability benefits
  • life insurance payments needed for support

CCP §§ 703.140(b)(7),(8),(10),(11)

  • matured life insurance benefits needed for support of unlimited value
  • $15,250 in an unmatured life insurance policy
  • fraternal unemployment benefits
  • disability or health benefits
  • fraternal benefit society benefits

CCP §§ 704.010 - 704.130; 704.170

Available Federal Exemptions

Federal Nonbankruptcy Exemptions

Federal Nonbankruptcy Exemptions


California Code

California Code

The above list is not exhaustive, is not being updated, and more California exemptions exist. As with all exemptions, check for current amounts and qualification requirements.

Important retirement benefit note. Federal law lets all filers keep tax-exempt retirement accounts in bankruptcy. These retirement accounts include 401(K)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and traditional and Roth IRAs to $1,512,350 per person. (11 U.S.C. 522(b)(3)(C); (n); amounts valid for bankruptcy cases filed between April 1, 2022, and March 31, 2025.)

How to Verify Available Exemptions in California

Almost everyone who files for bankruptcy benefits from meeting with a bankruptcy lawyer. A local bankruptcy attorney will ensure a smooth and uneventful bankruptcy by complying with filing requirements and helping you protect all possible property.

What Are the California Bankruptcy Exemption Timing Rules?

It's tempting to move to a state with significantly more generous bankruptcy exemptions when filing for bankruptcy. But it doesn't work that way. To prevent people from abusing the system, filers must live in the state for at least two years. Otherwise, they must use the previous state's exemptions. Here's how it works.

  • If you've made your permanent home (your "domicile") in your current state for at least two years, you can use the state's exemptions (or the federal exemptions if allowed).
  • If your domicile hasn't been in the same state for two years, the rules get more complicated, so prepare yourself. It sounds so strange we'll explain it in three different ways so that you know you didn't read it wrong. Here goes: You'll choose the state you lived in the longest during the 180 days immediately before the two years before filing.

Did you get that? If not, here's a way to figure it out. Count back two-and-a-half years. Then ask yourself where you lived the longest during the first six months of that two-and-a-half-year period.

Still confused? Let's try an example. Suppose you planned to file on January 1, 2022. Your two-and-a-half-year period would start July 1, 2019, and you'd qualify to use the exemptions of whichever state you resided in the most from July 1, 2019, through December 31, 2019. You wouldn't have to file your case there, but you'd use that state's exemptions. Hopefully, that helps!

Special Homestead Exemption Rules

The homestead exemption protects your ownership interest in your home. You'll need to read your state's homestead statute to determine the specifics, such as the amount of equity and acreage covered, whether the exemption protects a manufactured home, and if you need to file a homestead exemption with the county clerk. But in all states, the property must be your residence. Also, you'll need to comply with a federal timing law. Here's the rule:

You must live in the home for over 40 months before filing for bankruptcy. Otherwise, your homestead exemption is capped at $189,050 if you file on or after April 1, 2022 (the amount changes every three years). This cap won't apply if you bought your home with home sales proceeds from that state.

What Happens to Property You Can't Exempt in a California Bankruptcy?

It will depend on the chapter you file. In Chapter 7 bankruptcy, you lose property not covered by an exemption. The bankruptcy trustee responsible for managing your case will sell the property for the benefit of your creditors.

In Chapter 13 bankruptcy, you can keep all your property. However, that luxury comes at a price. You'll pay your creditors the value of any property not covered by an exemption in your Chapter 13 repayment plan.

For example, say you own a car outright worth $3,000, and your state has a vehicle exemption of up to $5,000. Here's what would happen in each chapter.

  • Chapter 7 Bankruptcy. If you file for Chapter 7 bankruptcy, you will get to keep your car because the exemption would protect the equity fully. In the same example, if your vehicle were worth $15,000, the bankruptcy trustee would sell your vehicle, pay you $5,000 for the exemption, and distribute the rest to your unsecured creditors.
  • Chapter 13 Bankruptcy. In Chapter 13, you wouldn't need to pay extra to your creditors through your repayment plan. However, if the car were worth $15,000, you'd need to pay your creditors at least $10,000 (minus sales costs) through your plan.

Keep in mind that these examples don't take into account a vehicle loan. You'll find more information about protecting financed homes and cars in a California bankruptcy below.

How Do You Protect a Financed Home or Car in a California Bankruptcy?

Many wonder if they can wipe out a home mortgage or car loan and keep the property without paying for it. The simple answer is "No." If you still owe a balance on your mortgage or car loan, you must pay as agreed to prevent the lender from foreclosing or repossessing the property.

Why? Because when you purchased it, you gave the lender a property "lien." The lien created a secured debt, allowing the lender to take back the property if you don't pay as agreed, even in bankruptcy.

Protecting Financed Property in Chapter 7 Bankruptcy

Chapter 7 doesn't have a mechanism that will allow you to catch up on a mortgage or car payment over time. So, the mortgage or car payment must be current. You'll lose the property if you're behind on the payment and file for Chapter 7.

The lender will ask the bankruptcy court to allow the lender to proceed with foreclosure or repossession during the bankruptcy or wait until Chapter 7 ends.

A few more vehicle protection options exist in Chapter 7. Learn more about how to file for bankruptcy without losing a car.

Protecting Financed Property in Chapter 13 Bankruptcy

You don't lose property in Chapter 13. However, before the bankruptcy judge approves or "confirms" your plan, you must prove you earn enough to make the monthly payment and pay the late payments by the end of the three- to five-year plan.

Some filers can pay less on financed property if they qualify to reduce an auto loan to the car's value or strip a junior mortgage, credit line, or lien from a home. Learn more about catching up on arrearages in Chapter 13 and how mortgages work in bankruptcy.

Navigating Your Bankruptcy Case

Bankruptcy is essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because the rules apply to every case, you can't skip a step. We want to help you find the answers you need.

Below is the bankruptcy form for this topic and other resources we think you'll enjoy. For more easy-to-understand articles, go to TheBankruptcySite, or consider buying a self-help book like The New Bankruptcy by Attorney Cara O'Neill.

More Bankruptcy Information

Bankruptcy Forms and Document Checklist

Chapters 7 and 13 Bankruptcy Form List

Bankruptcy Document Checklist

You'll find fillable, downloadable bankruptcy forms on the U.S. Courts bankruptcy form webpage. The forms relating to this article topic include the following:

Schedule A/B: Property

Schedule C: The Property You Claim as Exempt

Statement of Intention for Individuals

More You Might Like

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Can I Use My Credit Card Before I File for Bankruptcy?

Should I Ignore a Debt Collector's Calls and Letters?

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

Updated: December 18, 2023

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