Today's Law As Amended

PDF |Add To My Favorites | print page

SB-308 Debtor exemptions.(2015-2016)



SEC. 2.SECTION 1.

 Section 703.140 of the Code of Civil Procedure is amended to read:

703.140.
 (a) In a case under Title 11 of the United States Code, all of the exemptions provided by this chapter, including the homestead exemption, other than the provisions of subdivision (b) are applicable regardless of whether there is a money judgment against the debtor or whether a money judgment is being enforced by execution sale or any other procedure, but the exemptions provided by subdivision (b) may be elected in lieu of all other exemptions provided by this chapter, as follows:
(1) If spouses  a husband and wife  are joined in the petition, they jointly may elect to utilize the applicable exemption provisions of this chapter other than the provisions of subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.
(2) (A)  If the petition is filed individually, and not jointly, for a spouse,  husband or a wife,  the exemptions provided by this chapter other than the provisions of subdivision (b) are applicable, except that, if both of the spouses  the husband and the wife  effectively waive in writing the right to claim, during the period the case commenced by filing the petition is pending, the exemptions provided by the applicable exemption provisions of this chapter, other than subdivision (b), in any case commenced by filing a petition for either of them under Title 11 of the United States Code, then they may elect to instead utilize the applicable exemptions set forth in subdivision (b).
(B) Notwithstanding subparagraph (A), a waiver is not required from a debtor who is separated from his or her spouse as of the date the petition commencing the case under Title 11 of the United States Code is filed, unless, on the petition date, the debtor and the debtor’s spouse shared an ownership interest in property that could be exempted as a homestead under Article 4 of this chapter.
(3) If the petition is filed for an unmarried person, that person may elect to utilize the applicable exemption provisions of this chapter other than subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.
(b) The following exemptions may be elected as provided in subdivision (a):
(1) The debtor’s aggregate interest, not to exceed twenty-four thousand sixty dollars ($24,060) twenty-five thousand five hundred seventy-five dollars ($25,575)  in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence.
(2) The debtor’s interest, not to exceed four six  thousand eight hundred  dollars ($4,800) ($6,000)  in value, in one or more motor vehicles.
(3) The debtor’s interest, not to exceed six hundred fifty  dollars ($600) ($650)  in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
(4) The debtor’s aggregate interest, not to exceed one thousand four five  hundred twenty-five dollars ($1,425) ($1,525)  in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
(5) The debtor’s aggregate interest, not to exceed in value one thousand two three  hundred eighty fifty  dollars ($1,280) ($1,350)  plus any unused amount of the exemption provided under paragraph (1), in any property.
(6) The debtor’s aggregate interest, not to exceed seven thousand one six  hundred seventy-five twenty-five  dollars ($7,175) ($7,625)  in value, in any implements, professional books, or tools of the trade of the debtor or the trade of a dependent of the debtor.
(7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.
(8) The debtor’s aggregate interest, not to exceed in value twelve thirteen  thousand eight six  hundred sixty seventy-five  dollars ($12,860), ($13,675),  in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.
(9) Professionally prescribed health aids for the debtor or a dependent of the debtor.
(10) The debtor’s right to receive any of the following:
(A) A social security benefit, unemployment compensation, or a local public assistance benefit.
(B) A veterans’ benefit.
(C) A disability, illness, or unemployment benefit.
(D) Alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(E) A payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless all of the following apply:
(i) That plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor’s rights under the plan or contract arose.
(ii) The payment is on account of age or length of service.
(iii) That plan or contract does not qualify under Section 401(a), 403(a), 403(b), 408, or 408A of the Internal Revenue Code of 1986. 1986, as amended, on a basis other than a technical defect alone. 
(F) Vacation credits or accrued, or unused, vacation pay, sick leave, or family leave.
(11) The debtor’s right to receive, or property that is traceable to, any of the following:
(A) An award under a crime victim’s reparation law.
(B) A payment on account of the wrongful death of an individual of whom the debtor was a spouse or  dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(C) A payment under a life insurance contract that insured the life of an individual of whom the debtor was a spouse or  dependent on the date of that individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(D) A payment, not to exceed twenty-four thousand sixty dollars ($24,060), twenty-five thousand five hundred seventy-five dollars ($25,575),  on account of personal bodily injury of the debtor  debtor, the spouse of the debtor,  or an individual of whom the debtor is a dependent.
(E) A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a spouse or  dependent, to the extent reasonably necessary for the support of the debtor and any  a spouse or  dependent of the debtor.
(12) (A) Except as provided in Article 5 (commencing with Section 708.410) of Chapter 6, a cause of action arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt without making a claim.
(B) An award of damages from or a settlement arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor.

SEC. 1.5.

 Section 703.140 of the Code of Civil Procedure is amended to read:

703.140.
 (a) In a case under Title 11 of the United States Code, all of the exemptions provided by this chapter, including the homestead exemption, other than the provisions of subdivision (b) are applicable regardless of whether there is a money judgment against the debtor or whether a money judgment is being enforced by execution sale or any other procedure, but the exemptions provided by subdivision (b) may be elected in lieu of all other exemptions provided by this chapter, as follows:
(1) If spouses are joined in the petition, they jointly may elect to utilize the applicable exemption provisions of this chapter other than the provisions of subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.
(2) (A)  If the petition is filed individually, and not jointly, for a spouse, the exemptions provided by this chapter other than the provisions of subdivision (b) are applicable, except that, if both of the spouses effectively waive in writing the right to claim, during the period the case commenced by filing the petition is pending, the exemptions provided by the applicable exemption provisions of this chapter, other than subdivision (b), in any case commenced by filing a petition for either of them under Title 11 of the United States Code, then they may elect to instead utilize the applicable exemptions set forth in subdivision (b).
(B) Notwithstanding subparagraph (A), a waiver is not required from a debtor who is separated from his or her spouse as of the date the petition commencing the case under Title 11 of the United States Code is filed, unless, on the petition date, the debtor and the debtor’s spouse shared an ownership interest in property that could be exempted as a homestead under Article 4 of this chapter.
(3) If the petition is filed for an unmarried person, that person may elect to utilize the applicable exemption provisions of this chapter other than subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.
(b) The following exemptions may be elected as provided in subdivision (a):
(1) The debtor’s aggregate interest, not to exceed twenty-four thousand sixty dollars ($24,060) twenty-five thousand five hundred seventy-five dollars ($25,575)  in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence.
(2) The debtor’s interest, not to exceed four six  thousand eight hundred  dollars ($4,800) ($6,000)  in value, in one or more motor vehicles.
(3) The debtor’s interest, not to exceed six hundred fifty  dollars ($600) ($650)  in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
(4) The debtor’s aggregate interest, not to exceed one thousand four five  hundred twenty-five dollars ($1,425) ($1,525)  in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
(5) The debtor’s aggregate interest, not to exceed in value one thousand two three  hundred eighty fifty  dollars ($1,280) ($1,350)  plus any unused amount of the exemption provided under paragraph (1), in any property.
(6) The debtor’s aggregate interest, not to exceed seven thousand one six  hundred seventy-five twenty-five  dollars ($7,175) ($7,625)  in value, in any implements, professional books, or tools of the trade of the debtor or the trade of a dependent of the debtor.
(7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.
(8) The debtor’s aggregate interest, not to exceed in value twelve thirteen  thousand eight six  hundred sixty seventy-five  dollars ($12,860), ($13,675),  in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.
(9) Professionally prescribed health aids for the debtor or a dependent of the debtor.
(10) The debtor’s right to receive any of the following:
(A) A social security benefit, unemployment compensation, or a local public assistance benefit.
(B) A veterans’ benefit.
(C) A disability, illness, or unemployment benefit.
(D) Alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(E) A payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless all of the following apply:
(i) That plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor’s rights under the plan or contract arose.
(ii) The payment is on account of age or length of service.
(iii) That plan or contract does not qualify under Section 401(a), 403(a), 403(b), 408, or 408A of the Internal Revenue Code of 1986. 1986, as amended, on a basis other than a technical defect alone. 
(F) Vacation credits or accrued, or unused, vacation pay, sick leave, or family leave.
(11) The debtor’s right to receive, or property that is traceable to, any of the following:
(A) An award under a crime victim’s reparation law.
(B) A payment on account of the wrongful death of an individual of whom the debtor was a spouse or  dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(C) A payment under a life insurance contract that insured the life of an individual of whom the debtor was a spouse or  dependent on the date of that individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
(D) A payment, not to exceed twenty-four thousand sixty dollars ($24,060), twenty-five thousand five hundred seventy-five dollars ($25,575),  on account of personal bodily injury of the debtor  debtor, the spouse of the debtor,  or an individual of whom the debtor is a dependent.
(E) A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a spouse or  dependent, to the extent reasonably necessary for the support of the debtor and any spouse or  dependent of the debtor.
(12) (A) Except as provided in Article 5 (commencing with Section 708.410) of Chapter 6, a cause of action arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt without making a claim.
(B) An award of damages from or a settlement arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor.

SEC. 3.SEC. 2.

 Section 704.010 of the Code of Civil Procedure is amended to read:

704.010.
 (a) Any combination of the following is exempt in the amount of two six  thousand three hundred  dollars ($2,300): ($6,000): 
(1) The aggregate equity in motor vehicles.
(2) The proceeds of an execution sale of a motor vehicle.
(3) The proceeds of insurance or other indemnification for the loss, damage, or destruction of a motor vehicle.
(b) Proceeds exempt under subdivision (a) are exempt for a period of 90 days after the time the proceeds are actually received by the judgment debtor.
(c) For the purpose of determining the equity, the fair market value of a motor vehicle shall be determined by reference to used car price guides customarily used by California automobile dealers unless the motor vehicle is not listed in such price guides.
(d) If the judgment debtor has only one motor vehicle and it is sold at an execution sale, the proceeds of the execution sale are exempt in the amount of two six  thousand three hundred  dollars ($2,300) ($6,000)  without making a claim. The levying officer shall consult and may rely upon the records of the Department of Motor Vehicles in determining whether the judgment debtor has only one motor vehicle. In the case covered by this subdivision, the exemption provided by subdivision (a) is not available.

SEC. 3.

 Section 704.085 is added to the Code of Civil Procedure, to read:

704.085.
 The aggregate interest of a debtor who is engaged in a business, not to exceed five thousand dollars ($5,000), in cash or deposit accounts, accounts receivable, and inventory of the business is exempt.

SEC. 4.

 Section 704.111 is added to the Code of Civil Procedure, to read:

704.111.
 Alimony, support, and separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, are exempt.

SEC. 6.SEC. 5.

 Section 704.113 of the Code of Civil Procedure is amended to read:

704.113.
 (a) As used in this section, “vacation credits” means vacation credits accumulated by a state employee pursuant to Section 18050 of the Government Code or by any other public employee pursuant to any law for the accumulation of vacation credits applicable to the employee.
(b) (a)  All vacation credits are  or accrued, or unused, vacation pay, sick leave, or family leave is  exempt without making a claim.
(c) (b)  Amounts paid periodically or as a lump sum representing vacation credits are subject to any earnings withholding order served under Chapter 5 (commencing with Section 706.010) or any earnings assignment order for support as defined in Section 706.011 and are exempt to the same extent as earnings of a judgment debtor.

SEC. 7.SEC. 6.

 Section 704.115 of the Code of Civil Procedure is amended to read:

704.115.
 (a) As used in this section, “private retirement plan” means:
(1) Private retirement plans, including, but not limited to, union retirement plans.
(2) Profit-sharing plans designed and used for retirement purposes.
(3) Self-employed retirement plans and individual retirement annuities or accounts provided for in the Internal Revenue Code of 1986, as amended, including individual retirement accounts qualified under Section 408 or 408A of that code,  code and accounts that do not qualify on the basis of a technical defect alone,  to the extent the amounts held in the plans, annuities, or accounts do not exceed the maximum amounts exempt from federal income taxation under that code.
(b) All amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are exempt.
(c) Notwithstanding subdivision (b), where an amount described in subdivision (b) becomes payable to a person and is sought to be applied to the satisfaction of a judgment for child, family, or spousal support against that person:
(1) Except as provided in paragraph (2), the amount is exempt only to the extent that the court determines under subdivision (c) of Section 703.070.
(2) If the amount sought to be applied to the satisfaction of the judgment is payable periodically, the amount payable is subject to an earnings assignment order for support as defined in Section 706.011 or any other applicable enforcement procedure, but the amount to be withheld pursuant to the assignment order or other procedure shall not exceed the amount permitted to be withheld on an earnings withholding order for support under Section 706.052.
(d) After payment, the amounts described in subdivision (b) and all contributions and interest thereon returned to any member of a private retirement plan are exempt.
(e) Notwithstanding subdivisions (b) and (d), except as provided in subdivision (f), the amounts described in paragraph (3) of subdivision (a) are exempt only to the extent necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the support of the spouse and dependents of the judgment debtor, taking into account all resources that are likely to be available for the support of the judgment debtor when the judgment debtor retires. In determining the amount to be exempt under this subdivision, the court shall allow the judgment debtor such additional amount as is necessary to pay any federal and state income taxes payable as a result of the applying of an amount described in paragraph (3) of subdivision (a) to the satisfaction of the money judgment.
(f) Where the amounts described in paragraph (3) of subdivision (a) are payable periodically, the amount of the periodic payment that may be applied to the satisfaction of a money judgment is the amount that may be withheld from a like amount of earnings under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law).  706.010).  To the extent a lump-sum distribution from an individual retirement account is treated differently from a periodic distribution under this subdivision, any lump-sum distribution from an account qualified under Section 408A of the Internal Revenue Code shall be treated the same as a lump-sum distribution from an account qualified under Section 408 of the Internal Revenue Code for purposes of determining whether any of that payment may be applied to the satisfaction of a money judgment.

SEC. 7.

 Section 704.165 is added to the Code of Civil Procedure, to read:

704.165.
 (a) Except as provided in Article 5 (commencing with Section 708.410) of Chapter 6, a cause of action arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt without making a claim.
(b) An award of damages from or a settlement arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor.

SEC. 9.SEC. 8.

 Section 704.720 of the Code of Civil Procedure is amended to read:

704.720.
 (a) A homestead is exempt from sale under this division to the extent provided in Section 704.800.
(b) (1)  If a homestead is sold under this division or is damaged or destroyed or is acquired for public use, the proceeds of sale or of insurance or other indemnification for damage or destruction of the homestead or the proceeds received as compensation for a homestead acquired for public use are exempt in the amount of the homestead exemption provided in Section 704.730. The proceeds are exempt  704.730  for a period of six months after the time the proceeds are actually received by the judgment debtor, except that, if a homestead exemption is applied to other property of the judgment debtor or the judgment debtor’s spouse during that period, the proceeds thereafter are not exempt. as provided in paragraph (2). 
(2) If a homestead exemption is applied to other property of the judgment debtor or the judgment debtor’s spouse during the six-month period described in paragraph (1), the proceeds thereafter are not exempt.
(3) In a case under Title 11 of the United States Code, regardless of whether the sale is voluntary or involuntary, the expiration of the six-month period described in paragraph (1) at any time after the filing of the case shall not terminate the exempt status of the homestead or its proceeds.
(c) If the judgment debtor and spouse of the judgment debtor reside in separate homesteads, only the homestead of one of the spouses is exempt and only the proceeds of the exempt homestead are exempt.
(d) (1)  If a judgment debtor is not currently residing in the homestead, but his or her separated or former spouse continues to reside in or exercise control over possession of the homestead, that judgment debtor continues to be entitled to an exemption under this article until entry of judgment or other legally enforceable agreement dividing the community property between the judgment debtor and the separated or former spouse, or until a later time period as specified by court order. Nothing in this subdivision shall entitle the judgment debtor to more than one exempt homestead. Notwithstanding subdivision (d) of Section 704.710, for purposes of this article, “spouse” may include a separated or former spouse consistent with this subdivision. 
(2) Nothing in this subdivision shall entitle the judgment debtor to more than one exempt homestead.
(3) Notwithstanding subdivision (d) of Section 704.710, for purposes of this article, “spouse” may include a separated or former spouse consistent with this subdivision.

SEC. 10.SEC. 9.

 Section 704.730 of the Code of Civil Procedure is amended to read:

704.730.
 (a) The amount of the homestead exemption is one of the following:
(1) Seventy-five  One hundred  thousand dollars ($75,000) ($100,000)  unless the judgment debtor or spouse of the judgment debtor who resides in the homestead is a person described in paragraph (2) or (3).  
(2) One hundred fifty  thousand dollars ($100,000) ($150,000)  if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead a member of a family unit, and there is at least one member of the family unit who owns no interest in the homestead or whose only interest in the homestead is a community property interest with the judgment debtor.
(3) One Three  hundred seventy-five  thousand dollars ($175,000) ($300,000)  if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead any one of the following:
(A) A person 65 years of age or older.
(B) A person physically or mentally disabled who as a result of that disability is unable to engage in substantial gainful employment. There is a rebuttable presumption affecting the burden of proof that a person receiving disability insurance benefit payments under Title II or supplemental security income payments under Title XVI of the federal Social Security Act satisfies the requirements of this paragraph as to his or her inability to engage in substantial gainful employment.
(C) A person 55 years of age or older with a gross annual income of not more than twenty-five thousand dollars ($25,000) or, if the judgment debtor is married, a gross annual income, including the gross annual income of the judgment debtor’s spouse, of not more than thirty-five thousand dollars ($35,000) and the sale is an involuntary sale.
(b) Notwithstanding any other provision of this section, the combined homestead exemptions of spouses on the same judgment shall not exceed the amount specified in paragraph (2) or (3), whichever is applicable,  (3)  of subdivision (a), regardless of whether the spouses are jointly obligated on the judgment and regardless of whether the homestead consists of community or separate property or both. Notwithstanding any other provision of this article, if both spouses are entitled to a homestead exemption, the exemption of proceeds of the homestead shall be apportioned between the spouses on the basis of their proportionate interests in the homestead.
(c) A person who knowingly executes, or attempts to execute, a scheme or artifice to do either of the following is not entitled to a homestead exemption under this chapter:
(1) Defraud any person in connection with any commodity for future delivery, or any option on a commodity for future delivery, or any security of an issuer with a class of securities registered under Section 12 of the federal Securities Exchange Act of 1934 or who is required to file reports under Section 15(d) of that act.
(2) Obtain, by means of false or fraudulent pretenses, representations, or promises, any money or property in connection with the purchase or sale of any commodity for future delivery, or any option on a commodity for future delivery, or any security of an issuer with a class of securities registered under Section 12 of the federal Securities Exchange Act of 1934 or who is required to file reports under Section 15(d) of that act.

SEC. 11.SEC. 10.

 Section 704.960 of the Code of Civil Procedure is amended to read:

704.960.
 (a) (1)  If a declared homestead is voluntarily sold, the proceeds of sale are exempt in the amount provided by Section 704.730 for a period of six months after the date of the  sale.
(2) In a case under Title 11 of the United States Code, regardless of whether the sale is voluntary or involuntary, the expiration of the six-month period described in paragraph (1) at any time after the filing of such case shall not terminate the exempt status of the homestead or its proceeds.
(b) If the proceeds of a declared homestead are invested in a new dwelling within six months after the date of a voluntary sale or within six months after proceeds of an execution sale or of insurance or other indemnification for damage or destruction are received, the new dwelling may be selected as a declared homestead by recording a homestead declaration within the applicable six-month period. In such that  case, the homestead declaration has  shall have  the same effect as if it had been recorded at the time the prior homestead declaration was recorded.
SEC. 11.
 Section 1.5 of this bill incorporates amendments to Section 703.140 of the Code of Civil Procedure proposed by both this bill and SB 1005. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2017, (2) each bill amends Section 703.140 of the Code of Civil Procedure, and (3) this bill is enacted after SB 1005, in which case Section 1 of this bill shall not become operative.