A homestead exemption protects equity in your home from creditors. Here you’ll find specific information about the homestead exemption in California.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area. And to find other common exemptions in California, see California Bankruptcy Exemptions.
The Homestead Exemption Amount in California
If you file for bankruptcy in California and are eligible to use California’s bankruptcy exemptions, you can choose from two exemption systems, often called System 1 and System 2. (To learn more about which state exemptions apply in your situation, see Which Exemptions Can You Use in Bankruptcy?)
In California’s System 1, single homeowners who are not disabled may exempt up to $75,000 of the equity in their home or other property covered by the homestead exemption. You may exempt up to $100,000 if you live with a family member; $175,000 if you are 65 or older, or physically or mentally disabled; $175,000 if 55 or older, single, and earn a gross annual income under $15,000 or are married and earn a gross annual income under $20,000 and creditors seek to force the sale of your home. If you are married but separated, you may claim the homestead exemption in community property occupied by your spouse.
In California’s System 2, homeowners can exempt up to $24,060 of the equity in their home.
No Doubling for Married Couples in California
Some states allow married couples filing joint bankruptcy petitions to double the amount of the homestead exemption. California, however, does not allow married couples to double the homestead exemption amount.
The Scope of the California Homestead Exemption
In California System 1 the homestead exemption applies to real or personal property where you reside, including a mobile home, boat, stock cooperative, community apartment, planned development, or condominium. In System 1, the homestead exemption also applies to proceeds from a forced sale of your home received six months prior to bankruptcy.
In California System 2 the homestead exemption applies to real or personal property that the debtor or a dependent of the debtor uses as a residence, including a cooperative, or a burial plot for the debtor or dependent of the debtor.
The Federal Bankruptcy Exemptions Are Not Available to California Bankruptcy Filers
Some states allow bankruptcy filers to use the federal bankruptcy exemption system instead of the state system. California is not one of these states. If you reside in California, you must use either California System 1 or California System 2.
A Homestead Declaration Is Not Required in California
In California the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy. However, you may file a homestead declaration to protect your homestead exemption from judicial liens and to protect the proceeds of a voluntary sale of your home for six months.
Real Property Held as Tenancy in the Entirety
If property is held as a tenancy in the entirety, it means the property is jointly owned by a married couple as a single marital entity, not as individuals.
In California’s System 1, if only one spouse files for bankruptcy and the home is held as tenants in common, the filing spouse may claim the entire amount of the homestead exemption.
Finding the California Homestead Exemption Statutes
California’s System 1 homestead exemption is found in the California Code of Civil Procedure §§ 704.710, 704.720, and 704.730. California’s System 2 homestead exemption is found in the California Code of Civil Procedure § 703.140(b)(1).
To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.
Periodic Adjustment of California’s Exemptions
The California Judicial Council updates the California exemption amounts every three years. These amounts are not reflected in the statute.