In California, the homestead exemption is a legal provision that protects a certain amount of equity in a debtor’s primary residence from being seized or sold to satisfy debts in a bankruptcy proceeding. Homestead exemptions are laws that protect you from voluntary and involuntary liens such as taxes. The exemption allows individuals to retain a portion of the value of their home and provides them with a measure of protection during the bankruptcy process.
The recorded homestead exemptions require you to file the exemption with the county in which your property sits. The exemption only applies to your primary residential property and not other types of properties. The recorded homestead takes priority over subsequent voluntary and involuntary liens, although it is generally the case that a voluntary lien creditor (mortgage holder for example) will require that the Debtor waive their homestead in order to make the loan.
The unrecorded homestead exemption may be found under California Law and generally does not require recording in the county depending on the type of household and tax status you maintain.
The exemption protects the individual from primary judgment liens and some Californian Tax liens but not federal liens. Recently, the homestead exemption in California has increased from approximately $175,000 to approximately $600,000 and changes month to month based upon the median income in the county.
As such, the homestead exemption is a good avenue to explore as it can prevent various liens from attaching to the individual’s residential property.
It’s important to note that these exemption amounts are subject to change, and it’s advisable to consult with a bankruptcy attorney or refer to the current bankruptcy laws and regulations in California to obtain the most accurate and up-to-date information.
About the Finkel Law Group
Finkel Law Group, with offices in San Francisco and Oakland, has more than 40 years of experience assisting our clients navigate federal bankruptcy laws and state insolvency statutes. Our attorneys have the experience and expertise needed to help you and your management team successfully complete the liquidation or reorganization of your corporation, partnership or limited liability company.
When you need intelligent, insightful, conscientious and cost-effective legal counsel to assist you with the bankruptcy and reorganization issues confronting your company please contact us at (415) 252-9600, (510) 344-6601, or info@finkellawgroup.com to speak with one of our attorneys about your matter for a cost-free consultation.