A California Homestead Exemption could help protect the equity you’ve earned in your home from creditors who are trying to collect debts. Whether or not you’re eligible, and which of the various homestead options would work best for you, will be discussed in detail during your free evaluation. However, we at The Law Offices of Paul Y. Lee are providing the following information to give you an idea of what your options are.
The amount of your homestead exemption will vary based on several factors
First of all, know that California bankruptcy laws include a homestead exemption in both Chapter 7 and Chapter 13 bankruptcies. If you are eligible to use the bankruptcy exemptions in California then you’ll have two systems to choose from, which are frequently referred to as System 1 and System 2.
If you choose System 1 the amount you can exempt will vary. Here are some examples:
- Single, non-disabled homeowners may be able to exempt up to $75,000.
- Homeowners who live with another family member may be eligible for an exemption of up to $100,000.
- A person who is physically disabled, mentally disabled, or 65 years or older may be eligible to exempt up to $175,000.
- An individual who is 55 years or older, is single, and grosses less than $25,000 a year may be eligible for an exemption of up to $25,000.
Under California’s System 2, a person may be eligible for an exemption of up to $25,575.
Be aware of limitations
The California Homestead Exemption process is not a simple one, which is why we recommend you call The Law Offices of Paul Y. Lee at 951-755-1000 for your evaluation. Some limitations include:
- You must have owned your property for at least 1,215 before you file bankruptcy to be eligible for the homestead exemption. This is a federal law that applies to all 50 states.
- In some states, a married couple that files joint bankruptcy may be able to double their homestead exemption. However, California doesn’t allow it and so married couples are not eligible to double their exemption.
- Though some states allow people filing bankruptcy to choose to use federal bankruptcy exemptions, California is not one of those laws. You must choose either California System 1 or System 2.
- It’s not required for you to file a homestead declaration to be eligible for to claim the exemption during your bankruptcy. Instead, it’s automatic when you file. That said, you could file the declaration to further protect the exemption from liens and the proceeds if you voluntarily sell your home.
Are you ready for your free bankruptcy evaluation?
If the rules for California Homestead Exemptions are confusing to you, you’re not alone. Many people who try to handle their own bankruptcy end up overwhelmed and don’t have the best possible outcome. At The Law Offices of Paul Y. Lee we have years of experience helping people just like you. If you want to hold on to your property – and your equity – then it’s time for your free bankruptcy evaluation. Call us today at 951-755-1000 to get started.
