A chapter 7 bankruptcy lets you completely discharge most unsecured debts, giving you a chance to start over again with a clean slate. In exchange, the trustee may seize some of your assets to pay back the creditors. However, there are certain exemptions. Taking advantage of all the exemptions available under the law can keep you from losing everything.

Chapter 7 Bankruptcy Exemptions in California

State Exemption Lists

Some states allow borrowers to use either the federal list of exemptions or those contained in state law. In California, borrowers must use the state list, but the code lets you choose between two different systems. System 1 is geared towards petitioners who have significant home equity, while System 2 is best for those with other valuables.

Doubling Exemptions for Married Couples

In many jurisdictions, married couples filing a joint chapter 7 bankruptcy petition can double their maximum exemptions. In California, however, they are capped regardless of whether you’re filing as an individual or a couple.

What You Can Claim

Under System 1, individual petitioners can exempt up to $75,000 in equity in their property, while families get a $100,000 exemption. You could also keep up to $3,200 in vehicle equity, along with up to $8,000 in jewelry, heirlooms, and artwork. Most investment accounts like IRAs and 401(k)s are also exempt.

System 2 has a homestead exemption of $26,800 in equity, but you can keep vehicles with values of up to $5,350. $1,160 in jewelry is also exempt, as well as trade tools and other equipment you need to support yourself. You can also use a $1,425 wildcard exemption to cover any property of your choice, or up to $28,225 if you didn’t use the homestead option.

Deciding which system is best for your situation can be difficult. The experienced attorneys at Mark Briden Law in Redding, CA, will help you get financial relief. Their team has been providing chapter 7 bankruptcy services to clients since 1987. They also offer payment plans. Visit their website or call (530) 222-1664 to schedule your free consultation, either in person or over the phone.