The possibility of losing some of your possessions during bankruptcy can be very frightening. Many people wonder if they will need to find a new place to live or take public transportation after they declare bankruptcy. Thankfully, state law allows individuals going through bankruptcy to keep some of their most important possessions.

The law that dictates what property is not liquidated during Chapter 7 bankruptcy is called the California Bankruptcy Exemption Statute. There are two options from which individuals going through bankruptcy can choose, depending on their unique circumstances.

California bankruptcy exemptions, option one

Under option one, property owners may keep, among other things:

  • The value of a home, up to a certain amount of money and depending on a person's age (for example, a single person filing for bankruptcy may keep a home worth $75,000, a family can keep a home worth $100,000 and a disabled individual over 65 years old can keep a home worth $175,000).
  • Appliances, clothing, furniture, food and other daily needs items
  • $2,700 of Social Security funds in the bank for a single person
  • $2,550 in vehicles
  • Disability benefits and health benefits
  • Pensions and retirement benefits
  • Public assistance, including financial aid, unemployment and workers' compensation

California bankruptcy exemptions, option two

Under option two, property owners may keep, among other things:

  • Personal property up to $20,725
  • Up to $525 per item for household goods, books, animals, etc.
  • $3,300 in vehicles
  • Disability benefits and life insurance proceeds
  • Pensions
  • ERISA benefits
  • Public assistance, including Social security, unemployment and veterans benefits
  • Alimony and child support

Unlike in other states, individuals filing for bankruptcy may not use the federal bankruptcy exemptions. To learn more about which California bankruptcy option is best for you, speak with an experienced California bankruptcy lawyer.

Source: California Code of Civil Procedure, Section 704