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.