Procedure

• To benefit from an exemption, the debtor must make a timely claim for the exemption; otherwise, the exemption will have been waived. CCP § 703.030(a).

• The debtor must file a claim for the exemption within 10 days after the notice of levy on the property was served. CCP § 703.520(a).

• The debtor's claim for exemption must be made under oath and include a description of the property claimed exempt, a citation to the statute giving rise to the exemption, and a statement of facts supporting the claim of exemption. CCP § 703.520(b).

• Where the exemption is disputed by the creditor, the court will hold a hearing to determine the disposition of the property. CCP § 703.570.

• The debtor bears the burden of proving that the property is exempt. CCP § 703.580(b).

• Where the exemption requires a showing that the property is reasonably necessary for the support of the debtor and the debtor's spouse or dependents, the debtor must also submit a financial statement made under oath that details the debtor's sources of income and lists the debtor's assets and liabilities. CCP § 703.530.

Professional or Trade Assets

• Tools of the trade, professional equipment, one commercial vehicle, one marine vessel, or other property reasonably necessary for the debtor to earn a living, not exceeding $6,075 (the debtor's spouse also receives a $6,075 exemption for such property). CCP § 704.060.

• The exemption for a commercial vehicle is limited to $4,850. CCP § 704.060(d).

Wages and Benefits

• Seventy-five percent of the debtor's earnings are exempt, and previously paid earnings that can be traced to exempt earnings are exempt, but this does not limit support orders. CCP § 704.070.

• Welfare payments in a direct-deposit account are exempt up to $1,225 if just the debtor is the payee, or up to $1,825 if there are joint payees. CCP § 704.080(b)(1) and (3).

• Social Security payments in a direct-deposit account are exempt up to $2,425 if just the debtor is the payee, or up to $3,650 if there are joint payees. CCP § 704.080(b)(2) and (4).

• The portion of the account that can be traced to Social Security or welfare benefits is exempt. CCP § 704.080(c).

• Educational financial aid payments are exempt. CCP § 704.190.

Life Insurance and Annuities

• The cash value of a life insurance policy is exempted only to $9,700. CCP § 704.100(b).

• Payments from matured life insurance policies are exempt only as required for the support of the debtor and any dependents. CCP § 704.100(c).

• Note: There is no statutory exemption for annuities; however, if the annuity has a life insurance component, that component may qualify for the same treatment as a life insurance policy.

Retirement Plans and IRAs

• All amounts received from a public retirement plan are exempt, except for support payments. CCP §§ 704.110 and 704.114.

• Payments from and amounts held in non-qualified private retirement plans and retirement profit sharing plans are exempt, except as against support orders. CCP § 704.115(a)(1) and (2).

• Payments from and amounts held in qualified plans and individual retirement accounts (IRAs) are partially exempt, except as against support orders, to the amount necessary for the support of the debtor and dependents. CCP §704.115(a)(3) and (e).

• Unemployment and disability compensation payments and contributions are exempt, except for support orders and some health care providers., CCP §§ 704.120 and 704.130.

Lawsuit Settlements and Awards

• An award or settlement of a personal injury case is exempt as necessary for the support of the debtor and dependants, unless the creditor has provided health care to the debtor for the injury giving rise to the award or settlement. CCP § 704.140.

• An award or settlement for wrongful death is exempt as necessary for the support of the debtor and dependants. CCP § 704.150.

• Except for a support order, payments for workers compensation and disability payments are exempt. CCP § 704.160.

Homestead

• A debtor who sells a homestead has six months to reinvest the proceeds into a new homestead or the protection will be lost. CCP § 704.710(c).

• If the debtor and the debtor's spouse reside in separate homesteads, then only one homestead is exempt. CCP § 704.720(c).

• Homestead is: $50,000 for a single person; $75,000 if the debtor is married or the head of the family; or $150,000 if the debtor is at least 65 years old, is mentally or physically disabled, or is over 55 years old with an income of less than $15,000 per year. CCP § 704.730.

• A residential or apartment lease of two years or less is exempt. CCP § 704.740.

• If a homestead exemption has been filed with the county tax assessor, then it will be presumed that the residence is a homestead and the creditor will bear the burden of proving otherwise; but if a homestead exemption has not been filed, then the debtor bears the burden of proof. CCP § 704.780(a).

• If the residence is determined to be exempt, the court shall order the sale of the property unless it is not likely to attract a bid of at least the protected value. CCP § 704.780(b).

• If the homesteaded property receives no bids in excess of the homestead protection, then the property may not be sold at that time and no new sale may be attempted by the creditor for a year afterwards. CCP § 704.800(a).

• A levy on a homestead shall not trigger a due-on-sale or other acceleration clause. CCP § 704.810.

• If the residence is owned by the debtor as a joint tenant with somebody else, then the joint tenancy interest and not the property itself shall be sold instead. CCP § 704.820(a).

• If the residence is owned in joint tenancy by two who are both debtors of the same creditor, then the property itself may be sold, but both debtors are each entitled to their own homestead exemption. CCP § 704.820(a).

• The proceeds of a sale of a homesteaded property shall be applied as followed: (1) to discharges mortgages, liens or other encumbrances; (2) to the debtor to the limit of their homestead exemption; (3) to the debtor's spouse to the limit of any of their additional homestead exemption; (4) to pay the costs of sale; and (5) to the creditor to the amount of the judgment plus interest, etc. CCP § 704.850.

• The recording of a homestead declaration prevents a judgment lien from attaching to the property to the amount of the homestead exemption; however, a judgment lien may apply to any value over the homestead exemption amount and this does not prevent a lien created by a support order. CCP § 704.950.

• The proceeds of a declared homestead are exempt from collection for six months after the date of sale. CCP § 704.960.