California Bankruptcy Exemptions 703

When you file for bankruptcy in California there are two sets of exemptions that are available for protecting your property from your creditors. In California you can either select from 703 bankruptcy exemptions or 704 bankruptcy exemptions, but not both. Under each section of these exemptions are a list of items that can be protected from creditors when you file for bankruptcy. The most commonly used exemptions when you don't have equity in a home is 703. As of April 1, 2010 changes in the amounts that you can protect under 703 became effective. Below is a detailed explanation of the most commonly used areas under 703 and how you can use them to protect your property from creditors in a bankruptcy. The amounts listed below provide the updated amounts that went into effect as of April 2010.

Homestead or Burial Plot Exemption – The total amount that you can protect in equity in your home or burial plot is $22,075. This means that if your home is worth $250,000 and you owe $230,000, then you have $20,000 in equity in a home that can be protected in a bankruptcy. In this case you can file for bankruptcy and protect the equity in your home, without having your creditors touch your home. If you do not have a home or any equity in your home or if you have less then $22,075 in equity in your home or burial plot then you can use the remaining portion as a wildcard protection. In the example above $2,075 would remain unused and could be used as a wildcard protection. The wildcard protection means that you can use this protection on any item that you may own up to the wildcard limit. The wildcard can be used to protect items such as money in bank account, stocks, collectibles, vehicles, business equipment, timeshares, ATV's, motorcycles, and cars. If you do not have a home or burial plot to protect then you can use the $22,075 to protect other property.

Automobile or Motor Vehicle Exemption – The total equity that you can protect in a motor vehicle or car is $3,525.00. For example if your car is worth $10,000 and you owe $8,000 then you can use the automobile exemption to protect the $2,000 in equity in your car. What if your car has more than $3,525.00 in equity, then you can utilize whatever you have not used in the wildcard protection amount to protect the remaining value of the car. The motor vehicle exemption can only be used to protect one vehicle. If you had an additional vehicle to protect then you would utilize whatever was available from the wildcard protection.

Household Goods, Furniture, & Personal Clothing Exemption – This exemption is used to protect your furniture, electronics, appliances, clothing and other household items. The exemption allows you to protect up to $550 in value per item. This means that if no single items is worth (liquidation/pawn shop value) more than $550 then all of your household effects and goods should be protected in the bankruptcy. If anything is over that amount then you can use the unused portion of the wildcard protection to protect that item.

Jewelry Exemption – The jewelry exemption allows you to protect jewelry items such as your wedding ring, watch, necklace, earrings up to $1425.00 in total value. If your jewelry totals in value over that amount then you can use the unused amount from the wildcard to protect the remaining amount.

Wildcard Exemption - The wildcard exemption allows you to protect any items up to $1,175. This amount is combined with any unused amount from the homestead exemption as a wildcard protection. This means that if you did not use any portion of the homestead exemption then your total wildcard protection would be $23,250. You could use the wildcard exemption to protect any items of property including equity in real estate or investment property, recreational vehicles, cash, stocks, bonds, tax refunds, etc. up to the wildcard amount.

There are a number of other protections in section 703 that are used to protect items such as retirement plans, tools of the trade and life insurance policies. The exemptions listed above are the most common exemptions used to protect property in bankruptcy. If you have additional property that you are concerned about protecting in bankruptcy, you should consult with an experienced bankruptcy attorney that can determine if the property can be protected.

From Southern California Law Advocates: Long Beach Bankruptcy Lawyer