California has “opted out” of the bankruptcy federal exemptions. Instead, residents of California can choose between two different sets of exemptions. Those exemptions are under sections 703 or 704 of the California Code of Civil Procedure. You must choose one section and can not use both or combine the two sections.
Often debtors mistakenly believe that if they have equity in their property than bankruptcy is not an option. However, both sections 703 and 704 of the California Code of Civil Procedure allow a debtor to exempt equity up to a certain limit. Typically, if the client has more equity in their property and less assets a 704 exemption makes more sense than a 703 exemption.
The majority of bankruptcy cases are deemed “no asset” cases, meaning the assets listed in the bankruptcy petiton are exempt. Choosing the correct section of exemptions is critical because if the value of an asset exceeds the exemption amount than the trustee will go after that asset.
If you have any questions regarding your bankruptcy exemptions contact an experienced Los Angeles bankruptcy lawyer at Sky Law Group today.
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