Under California Law, there are a number of assets that are protected when you file for bankruptcy. The homestead exemption protects the debtor’s home and its equity from being seized by creditors. California’s homestead exemptions significantly increased in 2021. The homestead amount was increased to the median sales price of the county that the home is located in, subject to a cap that is adjusted annually for inflation. The homestead exemption in California in 2021 had a minimum value of $300,000 and a maximum value of $600,000. In 2022, the adjusted California homestead exemption minimum is $313,200 and is capped at $626,400.
Therefore, homeowners may be able to file for Chapter 7 bankruptcy while keeping their home.
California Exemptions Increase for 2022
California bankruptcy exemptions
Californians have a special set of exemptions available only in bankruptcy, since state law prohibits them from claiming the federal bankruptcy exemptions . Those exemptions are found in CCP 703.140 . (As of this writing, online versions of the code don’t reflect today’s increased numbers.)
Here are the new numbers:
| Equity in a residence | 31,950 |
| Equity in one or more motor vehicles | 6,375 |
| Household goods, clothing, books, animals, musical instrument (value of each item) | 800 |
| Jewelry | 1,900 |
| Grub stake (also called wild card) unused amount of residential exemption, plus | 1,700 |
| Tools of the trade, implements or professional books | 9,525 |
| Insurance loan value in policy on debtor or someone on whom debtor is dependent | 17,025 |
| Personal injury claim or recovery | 31,950 |
California state exemptions
The other exemption system that Californians can choose in bankruptcy applies also outside of bankruptcy. These classic exemptions are found in CCP 704 . Where those exemptions have a dollar cap, the numbers have increased as well.
Here are the new numbers:
| Motor vehicle | 3,625 |
| Material for repair or maintain residence | 3,825 |
| Jewelry, heirlooms, art | 9,525 |
| Tools of the trade | 9,525 |
| Money in a deposit account | 3.652 |
| Public benefits (per person) | 1.900 |
| Loan value of unmatured life insurance policies | 30,500 |
Prepared by Denali Purvis, Bankruptcy Paralegal and RoseAnn Frazee, Bankruptcy Attorney
