Consumer Law Center, Inc.

What are the exemptions allowed in California?

The California bankruptcy exemptions chart, see below, details the property you can exempt or protect from creditors. You may exempt any property that falls into one of the exemptions categories below, up to the dollar amount listed. You will be able to kept this exempted property after you file bankruptcy.

To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.

California has two sets of exemptions. You must choose System 1 or System 2 based on your circumstances. System 1 is generally indicated if you own real property. You also may use certain Federal Exemptions in addition to your California exemptions.

CALIFORNIA EXEMPTION SYSTEM 1

ASSET

EXEMPTION DESCRIPTION

LAW SECTION

$50,000 if single and not disabled;

$75,000 for families if no other member has a homestead (if only one spouse files, may exempt one-half of amount if home held as community property and all of amount if home held as tenants in common);

$150,000 if 65 or older, physically or mentally disabled, or if 55 or older, single and earn under $15,000 or married and earn under $20,000 and creditors seek to force the sale of your home.

Sale proceeds from an exempt homestead are exempt for 6 months after received.

A husband and wife may not double their homestead exemption.

In re McFall, 112 B.R. 336 (9^th Cir. B.A.P. 1990)

Sale proceeds from an exempt motor vehicle are exempt for 90 days after received.

A husband and wife may not double their motor vehicle exemption.

A husband and wife may not double their building materials exemption.

A husband and wife may not double their jewelry exemption.

A husband and wife may double their tools of the trade exemption if they jointly operate the trade, business, or profession by which they both earn a livelihood.

Commercial motor vehicles are limited to $4,850 ($9,700 for husband and wife operating the same business).

You cannot claim a motor vehicle under tools of trade exemption if you claimed the same motor vehicle or a motor vehicle suitable for business purposes under motor vehicle exemption.

75% of earnings paid within 30 days are exempt if you are not subject to an earnings assignment order for support.

Social security benefit payments directly deposited into a bank account to $2,425 ($3,650 if joint benefit payees).

In some cases all public benefit and social security benefit payments directly deposited into a bank account are exempt.

Paid earnings (see Paid Earnings).

Paid retirement benefits (see Retirement Benefits).

Paid life insurance death benefit (see Life Insurance).

CCCP § 704.080

CCCP § 704.080(c)

42 U.S.C. § 407

CCCP § 704.070

CCCP § 704.110(d)
CCCP § 704.115(d)

CCCP § 704.100(c)

A husband and wife are each entitled to a separate exemption or may double their inmate trust fund exemption.

Unmatured life insurance, endowment, and annuity policies (loan value) are exempt to the extent of $9,700.

A husband and wife are each entitled to a separate exemption or may double their unmatured life insurance loan value exemption.

Benefits from matured life insurance, endowment, and annuity policies (paid death benefits) are exempt to the extent reasonably necessary for the support of you, your spouse, and your dependants.

Life insurance proceeds (paid death benefits) if clause in life insurance policy prohibits proceeds from being used to pay beneficiary’s creditors.

Ins. Code § 10132
Ins. Code § 10170

Private and union retirement benefits, profit-sharing plans designed and used for retirement purposes, self-employed retirement plans, IRAs, and Keoghs are exempt to the extent necessary to provide support for you, your spouse, and your dependants when you retire.

CCCP § 704.115

County employees pension plans are exempt.

County peace officers pension plans are exempt.

County firefighters pension plans are exempt.

Gov. Code § 31452

Gov. Code § 31913

Gov. Code § 32210

Benefits paid by a labor union due to a labor dispute are exempt.

An award of damages or a settlement (lump-sum) arising out of a personal injury is exempt to the extent necessary for the support of you, your spouse, and your dependants.

Where an award of damages or a settlement arising out of a personal injury is payable in installments (structured settlement) it is treated as earnings. (See Paid Earnings).

CCCP § 704.140(b)

CCCP § 704.140(d)

An award of damages or a settlement (lump-sum) arising out of a wrongful death of your spouse, or someone for whom you were a dependant, is exempt to the extent necessary for the support of you, your spouse, and your dependants.

Where an award of damages or a settlement arising out of a wrongful death of your spouse, or someone for whom you were a dependant, is payable in installments (structured settlement) it is treated as earnings. (See Paid Earnings).

CCCP § 704.150(c)

Licenses issued by a public entity to engage in a business, profession, or activity are not subject to enforcement of a money judgment.

Property of a business partnership is not subject to enforcement of a money judgment against a partner.

Fidelity bonds are not subject to enforcement of a money judgment held by a general creditor.

CCCP § 695.060

Corp. Code § 16501

Labor Code § 404

CALIFORNIA EXEMPTION SYSTEM 2

PLEASE NOTE: Married couples may not double any exemptions. CCCP §703.110; In re Talmadge, 822 F.2d 1120 (9^th Cir. 1987); In re Baldwin, 70 B.R. 612 (9^th Cir. B.A.P. 1987).

ASSET

EXEMPTION DESCRIPTION

LAW SECTION

Any unused portion of homestead exemption may be applied to any other property.

Accrued dividends, interest, or loan value of unmatured life insurance insuring your life or the life of your dependant and owned by you is exempt to the total value of $9,975.

Benefits from matured life insurance (death benefit) is exempt to the extent reasonably necessary for the support of you and your dependants.

CCCP
§ 703.140(b)(8)

CCCP
§ 703.140(b)(11)(C)

Veteran’s Benefits are 100% exempt.

Disability, illness, and Unemployment Benefits are 100% exempt.

Alimony, support, or separate maintenance is exempt to the extent reasonably necessary for the support of you and your dependants.

Awards under a crime victim’s reparation law are 100% exempt.

CCCP
§ 703.140(b)(10)(B)

CCCP
§ 703.140(b)(10)(C)

CCCP
§ 703.140(b)(10)(D)

CCCP
§ 703.140(b)(11)(A)

Payments in compensation of loss of your future earnings or the future earnings of a person for whom you are or were a dependant (parent or spouse) are exempt to the extent reasonably necessary for the support of you and your dependants.

CCCP
§ 703.140(b)(11)(E)

Licenses issued by a public entity to engage in a business, profession, or activity are not subject to enforcement of a money judgment.

Property of a business partnership is not subject to enforcement of a money judgment against a partner.

Fidelity bonds are not subject to enforcement of a money judgment held by a general creditor.

CCCP § 695.060

Corp. Code § 16501

Labor Code § 404

ADDITIONAL FEDERAL EXEMPTIONS

ASSET

EXEMPTION DESCRIPTION

LAW SECTION

Civil service employees

Foreign service employees

Military honor roll pensions

Military service employees

Railroad workers

Social Security

Veterans' benefits

Veterans' medal of honor benefits

5 U.S.C.§ 8346

22 U.S.C. § 4060

38 U.S.C. § 562

10 U.S.C. § 1440

45 U.S.C. § 231m

42 U.S.C. § 407

38 U.S.C. § 3101

38 U.S.C. § 562

Lighthouse workers

Military service

33 U.S.C. § 775

10 U.S.C. § 1450

Longshoremen and harbor workers

War risk hazard death or injury compensation

33 U.S.C. § 916

42 U.S.C. § 1717

Military deposits in savings accounts while on permanent duty outside continental U.S.

Military group life insurance

Railroad workers' unemployment insurance

Seamen's clothing

Seamen's wages (while at sea) pursuant to a written contract