In most cases, people will not lose their home if they file for Chapter 7 Bankruptcy. Many people in California have little or no equity in their homes and do not have worry about a forced sale of their home by the bankruptcy trustee. For people with equity in their home, California has a very generous homestead exemption which protects your home if you file for bankruptcy. The exemption is given by California Code of Civil Procedure §704.730(a). The law protects equity in your home in the following amounts:
- $75,000 is the minimum homestead exemption used mostly by people who are single and not disabled or elderly
- $100,000 is the amount for a "family unit" (family unit can be debtor who lives with any of the following: spouse, minor child, minor grandchild, minor brother/sister, mother, father, grandmother, grandfather, or an unmarried relative who is 18 or older and unable to take care of themselves.)
- $175,000 for individuals who meet qualifications as being either: elderly (65 years or older), disabled from employment, or having low income and at least 55 years old.
Looking at the current housing market, the majority of people should be able to fully exempt all their equity in their homes. It is important to fully protect all of your assets when filing for bankruptcy and hiring an attorney can make sure you are fully protected.
If you have any questions about bankruptcy call 1st California Law Inc at (949) 735-8499 for a free attorney consultation.