Exempt Property in California Bankruptcy

Exemptions in California Bankruptcy

Exemptions determine what property you can keep when you file bankruptcy. California offers two sets of exemptions—you must choose one system and use it exclusively.

System 1 (CCP 704)

Includes a large homestead exemption (up to $300,000-$600,000+ depending on circumstances), plus exemptions for personal property, tools of trade, and retirement accounts.

System 2 (CCP 703)

No large homestead exemption, but includes a "wildcard" exemption that can protect any property, plus specific exemptions for personal property. Often better for renters or those with little home equity.

Commonly Exempt Property

• Retirement accounts: 401(k), IRA, and pension are generally fully exempt
• Home equity: Up to the homestead limit
• Vehicle: Equity up to ~$3,300-$7,500 depending on system
• Household goods: Generally exempt if not too valuable
• Tools of trade: Up to ~$8,000-$9,000

An experienced bankruptcy attorney can advise which exemption system is best for your situation.