California Senate Bill SB-308 Increases Bankruptcy Exemptions
Bankruptcy Exemptions For Your Home
On May 22, 2015 the California Senate passed a great new bill that would help Californians who file for bankruptcy protect more property, specifically equity in their homes and vehicles. Currently, a person filing bankruptcy can protect anywhere from $100,000 up to $175,000 equity in their residence, depending on their age, marital status, and the number of people in the household. SB 308 is a bill that was strongly supported by consumer groups and advocates that substantially increased the amount of home equity that can be protected to an across-the-board $300,000 for all debtors. That means a person can file bankruptcy and keep his/her house even if it is free and clear of liens as long as the value is less than $300,000. Alternatively , if the fair market value minus the mortgage(s) is less than $300,000, the home is safe in bankruptcy no matter how high the home price. The increase in protection for home equity provided for by SB 308 is huge, especially for residents of a state like California that has high home values that are rapidly rising even higher.
Bankruptcy Exemptions For Vehicles
Currently, you can protect up to $2,900 worth of equity in vehicles in a bankruptcy. SB 308 more than doubles the amount of automobile equity that can be exempted. This more reasonable exemption limit will ensure that more debtors can file bankruptcy without losing one of their most valuable and necessary assets.
Overall, Senate Bill 308 makes important and much-needed changes that will allow more struggling Californians to get a fresh start while protecting their essential assets. The next step in the process is for this bill to proceed to the California State Assembly. Passage of the bill in the Assembly would indeed be a victory for the citizens of California!