Incredible News for Ventura County Residents: Possible Increase in California Bankruptcy Exemptions

The following summary is not authored by me.  These materials were prepared by Elissa D. Miller of Sulmeyer Kupetz, P.C. in Los Angeles, California.  I have copied them here to reproduce the excellent communication from Ms. Miller on behalf of all consumer bankruptcy attorneys.

June 22, 2011

Dear Insolvency Law Committee Constituency List members:

The following is an Ebulletin prepared on a case of interest by a member of the Insolvency Law Committee:  

A bill to again revise California Exemptions, introduced by Assembly Member Wieckowski, has recently passed the Assembly without opposition and is now in the Senate.  On June 14, 2011 the bill was favorably reported out of the Senate Judiciary Committee and is slated to be taken up by the Senate Appropriations Committee within the next few weeks.  It appears to be on a fast track.

The Bill, AB 929, results in the second substantial increase in the homestead exemption in the last year and includes major revisions to the exemptions applicable if no homestead is taken.  A copy of the bill can be found at

The stated purpose of the bill is as follows: 

This bill would revise and recast those alternative exemption provisions and would, among other things, increase the exemption available for the debtor's interest in motor vehicles; jewelry, heirlooms, and works of art; and tools and other items used in the debtor's trade, business, or profession or in the trade, business, or profession of the debtor's spouse. The bill would revise the alternative exemption provisions relating to household furnishings, life insurance contracts, wrongful death and personal injury actions, unemployment compensation payments, and cemetery plots and would add to those alternative exemption provisions exemptions for workers' compensation benefits, specified aid payments and relocation benefits, and financial aid for higher education.
Existing law provides an exemption from enforcement of a money judgment for a homestead, as defined, in specified amounts.
With regard to the homestead exemption in CCP section 704.730, the bill results in the increase in the exemption amounts as follows:

Current Law Proposed Change
Individual $75,000 $150,000
Family Unit $100,000 $250,000
Over 65/Disabled/Low Income $175,000 $350,000

The bill also increases the maximum income allowed to qualify for the low income homestead exemption for people from $15,000 to $22,000 for an individual and $20,000 to $29,000 for a married couple.

With regard to the exemptions applicable if no homestead is claimed,  CCP section 703.104(b), the bill does not increase the wildcard, per se, but does increase other provisions and also creates new exemptions such that the total amount exemptible has now increased substantially.  .  The stated purpose of these amendments is to conform the CCP Section 703.140(b) exemptions to the CCP Section 704.010 et seq. exemptions to protect those without homes in the event they file for bankruptcy protection.   While the language of the changes to the CCP Section 703.140(b) exemptions would appear to parallel the CCP Section 704.010 et seq. exemptions, the amounts are not the same.  The exemptions available under CCP Section 703.140(b) are substantially higher than those in CCP Section 704.010 et seq.

For example, a burial plot which previously was included under CCP section 703.140(b)(1) now has its own separate section, new CCP section 703.140(b)(17) and is exempt without regard to value.

A chart of certain of the increases follows:

Property Exempt Current Law Proposed Change
Vehicles $3,525 (one vehicle only) $4,800 of aggregate equity
Jewelry, heirlooms and works of art $1,425 $5,000
Tools of the Trade $2,200 $6,075 (and if married both spouses entitled to claim exemption)
Unmatured life insurance including annuities but not the loan value $11,800 unlimited
Loan value of unmatured life insurance included in $11,800 above $9,700 (and if married both spouses entitled to claim exemption)
Personal Injury $22,075 (for actual pecuniary loss) unlimited

The author has been advised that the Bill has been opposed by the California Bankers Association.  The Bill will result in a reduction in the number of bankruptcy cases administered with assets.  In other words, Debtors, without homes to protect in Chapter 7 bankruptcies, will be able to protect more assets.

Thank you for your continued support of the Committee.

Best regards,

Insolvency Law Committee

Mansfield Law Office
701 E. Santa Clara St., Suite 13
Ventura, CA 93001
The Bankruptcy Attorney in Ventura with the Broadest Experience