California is often considered the maverick state, and its bankruptcy laws are no exception. California has not only opted out of the federal bankruptcy exemptions, but has also created two sets of exemptions of its own; one set is similar to the federal but not the same. This is California Exemptions-System 2. Most state exemptions give a major advantage to people who own their residences. In both the federal exemptions and California System 2, people who don’t own their homes can use some of that exemption to keep other property. California allows people filing for bankruptcy to use over twice as much as the federal exemptions for a wildcard.
Filers can choose between the two state systems. But they can’t use both systems at the same time. The exemption amounts in System 2 are the same for both single and married people. Married couples aren’t allowed to double the amounts.
| California Bankruptcy Exemptions – System 2 |
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| Asset |
Exemption |
State Statutes |
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| Homestead |
Property, real or personal, used as a residence: up to $20,725. Any
unused portion of this amount can be applied to any property. |
703.140(b)(1) |
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| Insurance |
Life insurance policy (unmatured) other than credit: all. |
703.140(b)(7) |
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Life insurance contract (unmatured): up to $11,075 in accrued avails. |
703.140(b)(8) |
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Disability benefits: all. |
703.140(b)(10)(C) |
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Life insurance proceeds: all necessary for support of family. |
703.140(b)(11)(C) |
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| Miscellaneous |
Child support and alimony: all necessary for support. |
703.140(b)(10)(D) |
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| Pensions |
Federal pension exemptions (see federal exemptions). |
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Benefits qualified under ERISA: all necessary for support. |
703.140(b)(10)(E) |
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| Personal Property |
Burial plot: Up to $20,725 of the unused homestead exemption. |
703.140(b)(1) |
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Motor vehicle: up to $3,300. |
703.140(b)(2) |
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Furnishings, appliances, household goods, books, musical
instruments, clothing, animals, and crops: up to $525 per item. |
703.140(b)(3) |
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Jewelry: up to $1,350 total. |
703.140(b)(4) |
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Health aids: all. |
703.140(b)(9) |
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Recoveries for wrongful death: all necessary for support. |
703.140(b)(11)(B) |
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Recoveries for personal injury of the debtor or a person on
whom the debtor depends: up to $20,725, not including pain and suffering or pecuniary loss. |
703.140(b)(11)(D),(E) |
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| Public Benefits |
Public assistance: all. |
703.140(b)(10)(A) |
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Social Security benefits: all. |
703.140(b)(10)(A) |
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Unemployment compensation benefits: all. |
703.140(b)(10)(A) |
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Crime victims' compensation benefits: all. |
703.140(b)(10)(A) |
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Veterans' benefits: all. |
703.140(b)(10)(B) |
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Tools of trade such as tools, instruments, and books: up to $2,075 total. |
703.140(b)(6) |
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| Wages |
No exemption. (Federal nonbankruptcy wage exemption applies.) |
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| Wildcard |
Any property: up to $1,100. |
703.140(b)(5) |
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Any property: unused part of homestead or burial exemption. |
703.140(b)(5) |
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