What Property Can I Keep?
In consumer bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code, the debtor can designate certain property as exempt from the claims of creditors. Because federal bankruptcy policy has always favored the concept of the debtor's "fresh start" — a chance at a productive economic life without the pressure of unmanageable debt — keeping the debtor decently housed and clothed is an essential aspect of bankruptcy relief in the broader sense.
In relatively few consumer bankruptcy cases will a debtor actually have to liquidate or turn over property to a bankruptcy trustee to meet the claims of unsecured creditors. In most cases, substantially all of a California debtor's assets will be protected under federal or state exemptions.
To see how consumer bankruptcy exemptions can work for you in a California bankruptcy case, contact Sacramento bankruptcy attorney Gary D. Greule for a free consultation.
The Homestead Exemption
Fairly generous exemptions are available for equity in a homestead. The value of the California homestead exemption for any particular debtor ranges from $75,000 to $175,000, depending on the marital status, income, age and/or health condition of the debtor.
Other Property Exemptions
Other assets such as household goods, tools of the debtor's trade, pension or retirement benefits, insurance policies, personal injury or wrongful death claims, and limited equity in a motor vehicle are also covered.
The smaller but more flexible exemptions are available for debtors with little or no equity in a primary residence, or who do not own a home at all but might need to stop a car repossession or have other personal property of some value that the debtor wants to keep.
Bankruptcy debtors who have lived in California for less than two years should be aware that they're required to use the exemptions available in their previous state of residence. Sacramento bankruptcy lawyer Gary D. Greule can help you determine whether you're better off using your previous home state's exemptions or waiting until you qualify for the California exemptions before you file for bankruptcy.
Schedule a Free Consultation
We are pleased to serve clients throughout the Greater Sacramento area. To schedule a free consultation with bankruptcy attorney Gary D. Greule, contact our law office in Citrus Heights, California. For assistance, call 916-723-3606 or contact us by e-mail.