Legal Question in Bankruptcy in California

Re: California Exemption Systems for Bankruptcy

The animal exemption under CCP � 703.140(b)(3) may not exceed $450 for any one animal "held primarily for the personal, family, or household use of the debtor or a dependent of the debtor." The � 703.140 exemptions have a wild-card feature that could apply to any property.

As for wages in bank accounts under the � 704 scheme, those have to be very recent. Again, the wild-card under � 703.140 could be used to exempt these. You cannot "mix-and-match" exemption schemes, however. Good luck doing your own bankruptcy.

Re: California Exemption Systems for Bankruptcy

California has two Exemption Systems for Chapter 7 Bankruptcy. I have not been able to find anyone who is willing to answer these questions.

I will answer your questions

1) In Exemption System 1, 75% of the wages are considered exempt. What does this mean? Does that mean that a Trustee can take 25% of the wages to pay creditors? Does that mean the wages can be garnished up to 25%? How long are the wages subject to this percentage?

ANSWER: The wages they are talking about are either(A) "earned but unpaid wages" which means you earned them put you have to wait until payday to get them; or "B" are "wages that you have been paid in the last 30 days". This applies to the 704 exemption and is NOT NEW LAW. This law has been around for more than 22 years with few changes. Any competent bankruptcy attorney in California whould know this. It DOES NOT APPLY TO ANY MONEY YOU EARN IN THE FUTURE. You keep 100% of that.

2) In System 2, NO wages are exempt. What does this mean? Can 100% of the wages be taken by Trustee to pay creditors? Or does this mean that 100% of the wages can be garnished by creditors?

ANSWER: 100% of earned wages are subject to the trustee taking but: ONLY earned whether paid or not on the day you file. HOWEVER it is generally not done because the 703 exemtions have a "wild card" provision that almost always will protect it.

If so, for how long? I could not find any explanation of this in the codes. How is a person supposed to live if all of the wages are taken?

ANSWER: As stated above there is no "how long" as all the code applies to assets you have ON THE DAY THE CASE IS FILED, not ongoing earnings.

3) In System 2, it includes animals under personal property. Does this mean livestock animals or does it also include pets? Is a pet dog claimed as an exemption under System 2 - animals? If a person has a pet dog that is of little value ($25), does he/she have to use System 2 to ensure the dog is exempt? If System 1 is used (which does not have an animal exemption), can the pet dog be taken away and sold?

ANSWER: Your pooch is safe and will not be sold. Since it has no special retail value it can be listed and not exempted. I have NEVER in 25+ years had a pet taken by a trustee. The trustee in bankruptcy does not want your pooch as they would have to feed and care for it. If this were a $50,000 stud stallion horse that might be different. Relax on this one you are OK.

For more information you can view my web site at ca-bankruptcy-attorneys.com. My firm handles cases throughout California including Canoga Park. Yes, I know the valley. Lived in Canoga Park while in law school 28 years ago. By the way, I am a State Bar certified bankruptcy specialist.I do free phone consultaions.

Thank you for letting me help you.