Perspective on Bankruptcy bill
Books on bankruptcy
Bankruptcy in Briefa service of the Moran Law Group |
Where do I find exemptions?
Exemptions are the statutory provisions that define what assets a debtor can keep, free from the claims of his creditors, even in bankruptcy.
Exemption law differs in every state: Congress created exemptions in the Bankruptcy Code, but gave the states to right to prohibit their residents from using those exemptions in favor of their state exemptions. This is the only substantive way in which bankruptcy law is different between the states.
If your state has opted out of the bankruptcy exemptions, only the exemptions found in state law can be used to protect assets in bankruptcy. Corporations aren't entitled to claim exemptions.
Comparing exemption options
Where debtors have choices under state law, they must analyze what they own and determine how it can best be protected under the available exemptions.
Debtors who try to prepare their own bankruptcy schedules frequently have the most trouble getting the claims of exemption done properly and to their advantage. More on representing yourself
Comparing exemptions in California
Here is a rough comparison of the California state law exemptions, the California bankruptcy exemptions and the Bankruptcy Code exemptions. (The Bankruptcy Code exemptions are not available in California but the CCP 703 exemptions mirror the Bankruptcy Code list as it was when the California law was enacted. These values are from several years ago.)
The debtor must choose one set of exemptions: you can't pick an exemption from one system and another from the other system. If spouses file a joint case, they must select an exemption system for themselves, jointly: they can't each select a separate system. They don't get to double the exemptions.
This chart is not exhaustive and is intended only to demonstrate the differences in the systems.
|
Asset |
CA CCP 703 |
CA CCP 704 |
Bankruptcy Code |
| principal residence | $17,425 | $50K, 75K, or 125K | $16,150 |
| motor vehicle | $2775 | $1900 | $2575 |
| household goods & personal effects | unlimited number of items worth $450 or less each | ordinary and necessary household goods-no limit
|
$8,675 |
| jewelry | $1150 | $5000 | $1075 |
| tools of trade | $1750 | $5000 per debtor | $1625 |
| life insurance (cash value) | $9300 | $8000 per debtor | $8625 |
| any personal property | $925 plus unused residence exemption | ----- | $85O plus up to $8075 of unused residence exemption |
| claim for personal injury | $17,425 | amount necessary for support | $15,000 |
| retirement benefits that are property of the estate | amount necessary for support | unlimited | amount necessary for support |
Text of CCP 703.140 California bankruptcy exemptions
Text of CCP 704 California state law exemptions
BACK TO ALTERNATIVES & OPTIONS FOR THOSE IN DEBT
1674 N. Shoreline Blvd. Suite 140 Mt. View CA 650-694
4700
lawyers@moranlaw.net © Moran Law Group 1998-2008
Founding member of the BankruptcyLawNetwork- Real Lawyers Real Solutions