California's Exemption Laws Protecting Property in Bankruptcy
When you file for bankruptcy, you don't lose everything. California Bankruptcy Exemptions let you keep almost all of your valued assets, like cash, your home, your car, your retirement, and everything in your home. Californians are especially lucky here when it comes to filing bankruptcy in Los Angeles, Riverside, San Bernardino, Ventura, and Orange Counties, These laws that let you keep things are called "bankruptcy exemptions." Having the right attorneys, like those at Shield Law Group, can make sure you wipe out all your debt and keep all your stuff. Why not have your cake and eat it too?
What's Special About California
In places like Los Angeles and Riverside California, the rules about what you can keep are a bit different than the rest of the country. Each state has its own set of rules, but it's important to know California's two specific laws on the subject.
California's Own Rules
The big law about bankruptcy is a Federal law, but each state can choose to use it or make its own. California decided to make its own. So, if you live in places like the LA Metropolitan Area, you have to follow California's rules.
Two Sets of Rules in California
California gives you two options. You can pick from the state's own rules or a set that's a lot like the Federal rules. You have to pick one, and it's a big decision.
How to Pick the Right One
Choosing between the two sets of rules isn't easy. You'll need to talk to a lawyer to figure out which one is best for you.
Keeping Your Home in California
California is pretty generous when it comes to your home. You can keep a lot of its value, even after filing for bankruptcy. This amount went up from $75,000.00 to $600,00.00 for a single individual in 2021, then again in 2022 and is now tied to how much homes are selling for in your area, up to $678,391.00.
Home Rules in San Fernando Valley and San Bernardino
In 2023, whether you live in the San Fernando Valley, Encino, Beverly Hills, Riverside, Hollywood or San Bernardino, our laws and exemptions can protect over $678,391.00 of your home's value. This is great news for people living in these and many more areas throughout California.
What About Your Car and Money?
You can exempt and protect $7,500.00 of equity in a car. You can further protect different dollar amounts of cash depending on the type of account. For instance, retirement plans, pensions, 401(k)s, 403(b)s, public retirement accounts, and IRAs are all fully exempt and protected.
Federal Rules on Homes
The Federal rules aren't as good for keeping your home, but they're better for other things. You can keep more of your personal stuff under these rules.
The Federal Wildcard
The Federal rules have a "wildcard" that lets you keep anything you want, up to a certain amount. In 2023, this amount is $33,650. This could help you keep your car or even some cash.
How to Use the Wildcard
Let's say your car is worth $15,000. You could use the wildcard to keep it. You could even use it to keep some money in your bank account.
What If You Can't Keep Everything?
If you have stuff that doesn't fit under any rule, the court might sell it and give the money to your creditors. But sometimes, they might let you keep it if selling it is too much trouble or the costs of selling won't leave any money left over to benefit creditors. There are ups and downs depending on how many exemptions a debtor takes, which is why its so important to consult with a lawyer about your assets before filing a bankruptcy.
Moving Just for the Rules
Some people used to move to California just to use its generous rules. But now, you have to live here for a while before you can file for bankruptcy.