A homestead exemption protects equity in your home from creditors attempting to collect a debt and when you file for bankruptcy. 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 Bankruptcy Exemptions. And to find other common exemptions in California, see California Bankruptcy Exemptions.)
Some states allow bankruptcy filers to use the federal bankruptcy exemption system instead of the state system. California isn’t one of these states. If you reside in California and are eligible to use California’s bankruptcy exemptions, you must use either California System 1 or California System 2.
In California’s System 1, single homeowners who are not disabled can exempt up to $75,000 of the equity in their home or other property covered by the homestead exemption. You can 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, have a low income 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 $29,275 of the equity in their home.
The California Judicial Council updates the California exemption amounts every three years. The current amounts aren’t reflected in the statute. California last changed the exemption amounts on April 1, 2019. The System 1 homestead amount remained unchanged. The System 2 homestead amount changed from $26,800 to the current amount of $29,275. (CCP § 703.140(b)(1).)
In California System 1, the homestead exemption applies to 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 before bankruptcy.
In California System 2, the homestead exemption applies to 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. Under this system, the homestead exemption also applies as a wildcard exemption. You can use any unused portion of the homestead exemption in addition to the wildcard amount of $1,550. (CCP § 703.140(b)(5).)
To claim the full value of the homestead exemption in any state, you must have owned the property for at least 1,215 days before the bankruptcy filing. If you can't meet this requirement, federal law might limit your homestead exemption. (To learn more about this requirement and some critical exceptions to it, see The Homestead Exemption in Bankruptcy.)
Some states allow married couples filing joint bankruptcy petitions to double the amount of the homestead exemption. California, however, doesn’t allow married couples to double the homestead exemption amount.
In California, the bankruptcy homestead exemption is automatic—you don’t have to file a homestead declaration to claim the homestead exemption in bankruptcy (but you’ll still need to claim the homestead exemption when filling out your bankruptcy paperwork).
However, you might want to 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.
You’ll find California’s System 1 homestead exemption in the California Code of Civil Procedure § § 704.710, 704.720, and 704.730, and California’s System 2 homestead exemption in the California Code of Civil Procedure § 703.140(b)(1).
Updated: April 4, 2019