California Bankruptcy Exemptions
Protecting Your Property During Bankruptcy
When filing for
bankruptcy, the exemptions you claim determine what property you keep in
Chapter 7 and how much you will be required to pay certain creditors in
Chapter 13. It is to your advantage to claim the maximum exemptions allowable under
law. California is unique in that it has two different systems of state
property exemption. In some states, debtors are allowed to choose between
state and federal exemptions, but
in the state of California, you must choose one of the two types of state
exemptions to claim. "Mixing and matching" between the two systems
is not allowed.
For experienced legal guidance in claiming exemptions and all aspects of
the bankruptcy process, you can turn to a Fresno bankruptcy attorney with
Arnold Law Group, APC. Our lawyers have more than 30 years of combined
legal experience and thousands of satisfied clients. We have helped many
clients on their journey to financial recovery. When your financial situation
has gone seriously awry, you can rely on our firm to help you make the
right choices and guide you through the bankruptcy process.
State Exemption System 1 vs. System 2
Under System 1, when married couples are filing jointly, each spouse may
claim the full amount for each exemption, except for certain otherwise
noted items. This is called "doubling" and it is not allowed
under System 2.
Both systems in California include property exemptions for:
- Homestead
- Personal property
- Automobile equity
- Pensions
- Public benefits
- Tools of trade
- Insurance
However, the allowable amounts for the various exemptions in System 1 differ
from System 2. System 1 exempts 75% of wages paid within 30 days of filing
for bankruptcy, whereas System 2 has no exemption for wages. Alimony and
child support are exempted in System 2, but not in System 1. Debtors with
substantial equity in a home generally prefer System 1, while System 2
is often preferable to debtors with money in the bank or who own valuable
items because of its generous "wildcard" exemption.
A Fresno bankruptcy lawyer with our firm can assess your financial situation
to help you determine whether System 1 or System 2 is the best option
for you, and work with you to ensure that you are claiming the maximum
in allowable exemptions. Our firm can assist you with all aspects of bankruptcy,
from the initial determination of whether bankruptcy or an
alternative is your best option, to determining whether you are eligible to file Chapter
7, to rebuilding your credit in your life after bankruptcy.
Contact us for dedicated representation in all bankruptcy matters.