Скачать или смотреть How The New 2024 Homestead Exemptions For Bankruptcy Works In California - Lawyer Gebelt Explains

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Law Offices of Nicholas Gebelt
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Whittier, CA 90604
(562) 777-9159

A sea change in the homestead exemption law occurred a few years ago. The dollar amount was increased at the beginning of this year, but the main change in the exemption structure occurred earlier. Before the change, there were several tiers for precisely what the homestead exemption was, whether you were married or over 65. It was complicated and stingy.

California has expensive real estate. Most people found that the homestead exemption was insufficient to protect the equity in their homes. As a result, there was a change in the concept of the homestead exemption.

Since January 2024, when the law changed, you get no more than the median sales price for a home in your county up to a maximum of $699,425, up from $600,000. That only applies to your principal residence. You can't use the exemption for rental or commercial property. If you have less than that amount, the equity should be protected outside of bankruptcy.

The homestead exemption protects people from losing their homes, but there are some limitations when filing for bankruptcy. While bankruptcy is filed under federal law, the homestead exemption exists under California state law.

In the bankruptcy code, there is an exemption table that covers more than real property. It covers almost any assets you might have, but the code permits the state to use its own tables.

California is unique among states for having two exemption tables. One is the homeowner's table for those with equity in their principal residences. The other is for everybody else, known as the renter's table. Because California opted out of the federal exemption table, you must choose either the homeowner's or the renter's table.

However, there's still a connection to the Bankruptcy Code. Section 522, a provision dealing with exemptions, has some limitations. The first limitation depends on how long you have owned the property.

If you owned the property for more than 1,215 days, which is 365-day years plus four 30-day months, you can use the California table with the $699,425 maximum. If you have owned the house for less than 1,215 days, the exemption drops precipitously to a little more than $190,000. Timing can be crucial to protecting the equity in your home because if you file too soon, you might have some non-exempt equity.

The second limitation is whether or not you've been convicted of a certain kind of felony within the last five years. If so, you don't get the maximum exemption from your state table. Instead, you're stuck with the $190,000 homeowner's exemption in the bankruptcy code.

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