UNDER C.C.P. § 704.010, et seq.
(Recommended for Homeowners)
A. Motor Vehicle [C.C.P. § 704.010]
1. Limit of $2,300.00 equity in motor vehicles. Use wholesale blue
book valuation.
B. Household Furnishings and Personal Effects [C.C.P. § 704.020]
1. Exempt where ordinarily and reasonably necessary to and personally
used or procured for use by the debtor and debtor's family at the
residence.
a. Items of extraordinary value are not exempt.
C. Materials for Repair or Improvement of a Dwelling [C.C.P. §
704.030]
1. Limit of $2,425.00 equity in material.
D. Jewelry, Heirlooms and Works of Art [C.C.P. § 704.040]
1. Limit of $6,075.00 in total equity, in all items. Value at wholesale
prices.
E. Health Aids [C.C.P. § 704.050]
1. Exempt.
F. Personal Property Used in Trade, Business or Profession [C.C.P.
§ 704.060]
1. Limit of $6,075.00 in aggregate equity for debtor and $6,075.00
for spouse if spouse uses property in spouse's occupation; for example,
computers. Possible exemption for a commercial vehicle. Value at wholesale
prices.
G. Paid Earnings [CCP § 704.070]
1. Paid earnings within 30 days before bankruptcy are exempt up
to 75% or more, depending on circumstances.
H. Deposit Accounts (Social Security)
1. Exempt to $2,425 or $3,650 for two depositors.
I. Life Insurance, Endowment, Annuity Policies [C.C.P. § 704.100]
1. Unmatured life insurance policies (term) are exempt.
2. Aggregate loan value of unmatured life insurance, endowment and
annuity policies are exempt to a limit of $9,700.00 per person, $19,400.00
for husband and wife.
3. Benefits from matured life insurance policies are exempt to the
extent reasonably necessary for the support of the debtor, debtor's
spouse and dependents.
J. Public Retirement and Related Benefits and Contributions [C.C.P.
§ 704.110]
1. All amounts are exempt.
K. Public Employee Vacation Credits [C.C.P. § 704.113]
1. All amounts are exempt.
L. Private Retirement and Related Benefits and Contributions [C.C.P.
§ 704.115]
1. Private retirement plans and death benefits are exempt without
limit. This includes 401(k), 403(b) and 457 plans.
2. Profit sharing plans designed and used for retirement purposes
are exempt.
3. Under State Law, self-employed retirement plans and IRA accounts and annuities
are exempt to the extent necessary to provide for the support of the
debtor when the debtor retires and for the support of the spouse and
dependents. Disputes over IRA accounts are usually settled. Courts
take numerous factors into account, including ages, income generating
ability, health and additional economic resources available at retirement.
Rollover IRA accounts will probably be treated as an IRA account,
not as a 401(k) account or other exempt account which was its source
of funding.
NOTE:The new Bankruptcy Law effective October 17, 2005 exempts up to $1,000,000 in IRA accounts. California has not adopted a similar statute. So state law applies when there is no bankruptcy.
M. Planning Point.
1. Some IRA account can be rolled over into completely exempt pension
plans.
N. Unemployment Benefits Are Exempt
O. Disability and Health Benefits Are Exempt
1. Exception -- payments to cover costs of health care are not exempt
as to providers of the health care.
P. Damages for Personal Injury
1. Exempt to the extent necessary for the support of the debtor,
spouse and dependents.
a. Exception as to health care providers.
Q. Damages for Wrongful Death
1. Treated the same as personal injury claims except there is no
exception for health care providers.
R. Worker's Compensation Awards Are Exempt
S. Welfare Benefits Are Exempt
T. Government Relocation Benefits Are Exempt
U. Educational Financial Aid Is Exempt
V. Cemetery Plots Are Exempt
W. Property Not Subject To Enforcement
1. Property that is not subject to enforcement of a money judgment
is exempt.
X. Homestead Exemption for Principal Dwelling [C.C.P. § 704.730]
1. The exemption is $50,000.00 for single persons and $75,000.00
for married couples, and single parents. See Code of Civil Procedure
§ 704.710 for definition of "family unit" which lists
those situations where the $75,000.00 exemption can be used.
2. There is a $150,000.00 exemption if:
a. The person is 65 years of age or older; or
b. The person is physically or mentally disabled and is therefore
unable to engage in substantial gainful employment; or
c. The person is single, age 55 or older, with a gross annual
income of $15,000.00 or less and the sale is involuntary; or
d. The person is married, age 55 or older, with a gross annual
income of $20,000.00 or less.
3. It is advisable to record a Declaration of Homestead prior to
filing a bankruptcy petition.
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