Under California's Chapter 704 exemptions, the following assets and equity can be protected:
You can insure up to $2,725 of the value of your motor vehicles. Listed below are examples of how this exemption operates:
If your vehicle is worth $10,000 and you owe $8,000 on it, then you have $2,000 in equity. Under the bankruptcy exemptions, the equity in a vehicle could be protected.
If you own two entirely paid-for vehicles, and vehicle number one is worth $1500 and vehicle number two is worth $1,000, then your total equity in the vehicles is $2500. Under bankruptcy exemptions, you can preserve the equity in both vehicles because their combined value does not exceed the $2,725 motor vehicle exemption.
Home furnishings, appliances, and clothing - Your household furnishings and clothing are protected if they are common and reasonable for your family's needs. There is no monetary value associated with this exemption. You may protect all domestic furnishings, appliances, and clothing as long as they are common and reasonable for your family's needs.
Jewelry, heirlooms, and works of art - You can insure up to $7,175 of the total value of your jewelry, heirlooms, and works of art.
You can insure up to $7,175 worth of tools, instruments, furnishings, books, and one commercial motor vehicle that are deemed reasonably necessary for the exercise of your trade or profession and are used to earn a livelihood. In addition, your spouse can use up to $7,175 worth of tools, instruments, and materials that are reasonable and necessary for practicing their profession and earning a livelihood.
Public retirement benefits and private retirement plans, including IRAs and profit sharing plans designed for retirement, are exempt from taxation.
Home Equity - The equity in your primary residence can be insured up to the following amount:
If you are a single person with no other occupants in your property, you can protect up to $75,000 in home equity.
If you are married and your spouse lives with you, you can protect up to $100,000 of home equity.
If you care for and maintain any of the following members of your household, you can protect up to $100,000 in home equity (if they have no interest in the property):
your or your spouse's minor child or grandchild, or the minor child or grandchild of a deceased spouse or former spouse, your or your spouse's minor brother or sister, or the minor child of your or your spouse's deceased brother or sister, your or your spouse's father, mother, or grandparents, or the father, mother, or grandparents of a deceased spouse.
A relative described above who is unmarried and over the age of 18 but unable to care for or support themselves.
If either you or your spouse is 65 or older, you can protect up to $175,000 in home equity.
If you are 55 or older, have an annual total income of less than $15,000, or if you are married and your combined income is less than $20,000, you can protect up to $175,000 in home equity.
If you are physically or mentally disabled, you can safeguard up to $175,000 in home equity.
The preceding information is not intended as legal advice, and you should always consult with an experienced bankruptcy attorney to ensure that your residence, automobile, and other personal property are protected. If you are contemplating bankruptcy, you should consult with a local bankruptcy attorney who should be able to evaluate your assets and determine if they can be protected.
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