California Bankruptcy Laws
Federal regulations provide property exemptions from liquidation; however, in California, only state exemptions apply. Those exemptions include:
Homestead |
Either System #1 OR System #2:
1: $75,000 for singles, $100,000 for families
2: $20,725 |
Personal Property |
1: Furnishings, clothing, appliances, and food; Social Security deposits to $2,700 (can be doubled); burial plot; health aids; some jewelry and heirlooms; motor vehicles to $2,550; personal injury awards; wrongful death awards
2: Animals, crops, furnishings, household goods, clothing, and more, up to $525/item; burial plot; health aids; some jewelry; motor vehicles to $3,300; personal injury recoveries to $20,775; wrongful death recoveries |
Wages |
1: 75% of wages paid with 30 days of bankruptcy petition |
Pensions |
1: County and public employees, firefighters, peace officers; public and private retirement benefits, including IRA’s & KEOGHS
2: ERISA qualified benefits required for support |
Public Benefits |
1: Aid to blind, aged, disabled, AFDC; student aid; relocation benefits; union benefits; unemployment; worker’s comp
2: Crime victim’s compensation public assistance, Social Security; unemployment; veteran’s benefits |
Tools of Trade |
1: Up to $6,750 in tools, materials, uniforms, books, furnishings, equipment, motor vehicle (limited to $4,850)
2: $2,075 |
Insurance |
1: Disability or health benefits; fidelity bonds; homeowner’s proceeds (6 months); some types of life insurance
2: Disability or health benefits; some types of life insurance proceeds or avails |
There are many options to consider before filing the petition for bankruptcy in California.That means that the debtor and their attorney lay the majority of the groundwork and the debtor fulfills the requirement for credit counseling in advance.
However, once a petition is filed, the debtor is subject to the decisions of the bankruptcy trustee, who may liquidate non-exempt property for those filing Chapter 7, and who establishes the repayment plan for those filing Chapter 13. Debtors, their attorneys, and the bankruptcy trustee must meet with creditors once to allow them to ask any pertinent questions about the final disposition of the petition.
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