Skip to Content

What Property Can I Exempt From My Bankruptcy Case?


Bankruptcy is an important tool that aids many people, and even businesses, in achieving a new financial start. If you don’t have many assets or much income, many debts can be discharged, or wiped-out, during bankruptcy.

However, when you file for bankruptcy, you obviously are not allowed to keep all of your property. In exchange for the benefit of clearing most of your debts, you must relinquish all property that is not exempt. These exemptions come from California statutes as well as federal law.

In California, state residents who file bankruptcy have the option of choosing one of two sets of exemptions, both of which apply to the amount of equity you have in certain property. Equity is the difference between the actual value of the property and what is owed on the property. For example, if you own a house valued at $350,000 with a mortgage balance of $150,000, your equity in the property is $200,000.

This article addresses the exemptions covered by the first system.

One major exemption in California is the homestead exemption. Under the first system, this exemption covers up to $75,000 of equity in a person’s home if the owner is single and not disabled, or $100,000 for families if one of the spouses does not also claim a homestead interest.

In addition to the homestead exemption, some of your equity in other personal property is protected. Personal property can include anything from furniture to clothing to artwork, a vehicle, assets in bank accounts, social security benefits and even burial plots.

Up to $2,000 of social security benefits will be protected for an individual, $3,000 for a married couple. Burial plot(s) and health aids will be completely exempt, as well as all necessary appliances, home furnishings, clothing and food.

Moreover, up to $6,075 of your equity in jewelry, artwork and heirlooms will be protected, but this cap is not increased for married couples. And, if you own equity in a motor vehicle, $2,300 will be exempt from your bankruptcy case.

Though these exemptions on personal property may not seem that significant, given the price of items like cars and jewelry, it is important to note that personal property is valued at its resale value, not at the price your paid for the property. For instance, even though you bought your 2010 BMW vehicle for $35,000, you could not re-sell the car for that price today in 2016. After years of use and regular wear and tear, your BMW may only be worth $1,700 to $2,400. Assuming you own the vehicle outright, you can exempt most if not all of the equity in the BMW (and flat-out keep the car) because $2,300 is protected.

You may also want to know that California has some of the greatest bankruptcy protections and exemptions in the country, and there are numerous other types of exemptions that cover certain types of income, property, and security interests. These include fidelity bonds, life insurance proceeds, and interests in a personal injury or wrongful death lawsuit, to name a few.

In order to know for sure how much of your property would be protected, it is important to speak with a bankruptcy attorney—like those at Fitzgerald & Campbell—to review your case and discuss your options with you. Our attorneys have decades of experience representing clients in all types of debtor defense cases and we are here to help you!

Call us today for a free consultation at (844) 431-3851, or email us at

Share To: