California SB 308, a bill that makes several significant changes to California exemptions in an effort to assist financially distressed Californians facing bankruptcy, was passed by the state Senate on May 22, 2015, and has been ordered to the Assembly for consideration.
Some of the major proposed changes include:
Homestead Exemption
Existing Law: Homestead exemption is $75,000, $100,000, or $175,000, depending on if the homeowner is single, married, has dependent children, has a disability or is over the age of 65.
Proposed Law: $300,000 for all.
Six-Month Reinvestment Requirement
Existing Law: Proceeds from the voluntary sale of a declared homestead are exempt for six months.
Proposed Law: Proceeds would be exempt indefinitely.
Vehicle Exemption
Existing Law: Aggregate equity in motor vehicles is $2,900.
Proposed Law: Increased to $6,000.
Individual Retirement Account Exemption
Existing Law: All amounts in private retirement plans, including self-employed retirement plans and individual retirement annuities or accounts qualified under Federal Internal Revenue Code of 1986.
Proposed Law: Expanded to include individual retirement accounts that do not qualify under those specified provisions on the basis of a technical defect alone.
Small Business Owner Exemption
Existing Law: No specific exemption to protect cash or deposit accounts, accounts receivable and business inventory.
Proposed Law: Exemption of $5,000 for small business owners using the Code of Civil Procedure Section 704 exemptions.
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