General Provisions - Exemptions - Civil Procedure - CA

Section § 703.010

This section explains that, generally, exemptions allowed by this chapter or other laws apply to enforcing a money judgment. That means certain protections or exceptions can be used when collecting a money judgment.

However, these exemptions don't apply if the judgment being enforced is for the foreclosure of a mortgage or similar property liens, unless it's a lien made under specific sections related to this division or Title 6.5 (attachment).

Except as otherwise provided by statute:

(a) The exemptions provided by this chapter or by any other statute apply to all procedures for enforcement of a money judgment.

(b) The exemptions provided by this chapter or by any other statute do not apply if the judgment to be enforced is for the foreclosure of a mortgage, deed of trust, or other lien or encumbrance on the property other than a lien created pursuant to this division or pursuant to Title 6.5 (commencing with Section 481.010) (attachment).

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Section § 703.020

This law states that property exemptions are available only to individuals (natural persons). These exemptions can be claimed by the person who owes the debt (judgment debtor) or someone representing them. In cases involving community property, the debtor's spouse or domestic partner can also claim the exemptions, even if they are not directly responsible for the debt.

(a) The exemptions provided by this chapter apply only to property of a natural person.

(b) The exemptions provided in this chapter may be claimed by any of the following persons:

(1) In all cases, by the judgment debtor or a person acting on behalf of the judgment debtor.

(2) In the case of community property, by the spouse of the judgment debtor, whether or not the spouse is also a judgment debtor under the judgment.

(3) In the case of community property, by the domestic partner of the judgment debtor, as defined in Section 297 of the Family Code, whether or not the domestic partner is also a judgment debtor under the judgment.

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Section § 703.030

This law section explains when and how property exemptions can be claimed to protect them from being used to satisfy a money judgment. If you don't claim the exemption in the right way and on time, you lose the exemption and the property can be taken to pay a debt. However, if the law says certain property is exempt without needing a claim, then it can't be used to pay judgments at all. Even if you miss the deadline to claim an exemption, the court can still grant relief to fix this mistake under certain conditions.

(a) An exemption for property that is described in this chapter or in any other statute as exempt may be claimed within the time and in the manner prescribed in the applicable enforcement procedure. If the exemption is not so claimed, the exemption is waived and the property is subject to enforcement of a money judgment.

(b) Except as otherwise specifically provided by statute, property that is described in this chapter or in any other statute as exempt without making a claim is not subject to any procedure for enforcement of a money judgment.

(c) Nothing in this section limits the authority of the court pursuant to Section 473 to relieve a person upon such terms as may be just from failure to claim an exemption within the time and in the manner prescribed in the applicable enforcement procedure.

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Section § 703.040

This law states that any agreement or contract a person signs that tries to give up their right to certain legal protections, known as exemptions, is not valid. The only valid waiver is if someone doesn't claim an exemption at the time it needs to be claimed when someone tries to enforce a legal action against them.

A purported contractual or other prior waiver of the exemptions provided by this chapter or by any other statute, other than a waiver by failure to claim an exemption required to be claimed or otherwise made at the time enforcement is sought, is against public policy and void.

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Section § 703.050

This section explains how to determine whether property is exempt from debt collection, or how much of it can be exempt. The rules in place at the time the creditor's lien was created are used. If there are overlapping liens, the time of the earliest lien applies. This applies to all judgments, regardless of the legal theory or when they were entered. For executing a lien, current laws at the time of the execution apply to procedures like selling property or handling exemptions.

(a) The determination whether property is exempt or the amount of an exemption shall be made by application of the exemption statutes in effect (1) at the time the judgment creditor’s lien on the property was created or (2) if the judgment creditor’s lien on the property is the latest in a series of overlapping liens created when an earlier lien on the property in favor of the judgment creditor was in effect, at the time the earliest lien in the series of overlapping liens was created.

(b) This section applies to all judgments, whether based upon tort, contract, or other legal theory or cause of action that arose before or after the operative date of this section, and whether the judgment was entered before or after the operative date of this section.

(c) Notwithstanding subdivision (a), in the case of a levy of execution, the procedures to be followed in levying upon, selling, or releasing property, claiming, processing, opposing, and determining exemptions, and paying exemption proceeds, shall be governed by the law in effect at the time the levy of execution is made on the property.

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Section § 703.060

This law explains how California handles exemptions related to money judgments. When people make contracts or when liens are placed on property, they usually don't expect that existing exemption rules will always apply. The state reserves the right to change these rules. So, judgments will follow the exemption rules and procedures that are in place at the time they're enforced, not when the contract was made or the lien was created. This ensures fairness among all judgment debtors. Essentially, any changes to these laws will apply to all judgments, regardless of when the legal case started or was decided.

(a) The Legislature finds and declares that generally persons who enter into contracts do not do so in reliance on an assumption that the exemptions in effect at the time of the contract will govern enforcement of any judgment based on the contract, that liens imposed on property are imposed not as a matter of right but as a matter of privilege granted by statute for purposes of priority, that no vested rights with respect to exemptions are created by the making of a contract or imposition of a lien, that application of exemptions and exemption procedures in effect at the time of enforcement of a judgment is essential to the proper balance between the rights of judgment debtors and judgment creditors and has a minimal effect on the economic stability essential for the maintenance of private and public faith in commercial matters, and that it is the policy of the state to treat all judgment debtors equally with respect to exemptions and exemption procedures in effect at the time of enforcement of a money judgment. To this end, the Legislature reserves the right to repeal, alter, or add to the exemptions and the procedures therefor at any time and intends, unless otherwise provided by statute, that any repeals, alterations, or additions apply upon their operative date to enforcement of all money judgments, whether based upon tort, contract, or other legal theory or cause of action that arose before or after the operative date of the repeals, alterations, or additions, whether the judgment was entered before or after the operative date of the repeals, alterations, or additions.

(b) All contracts shall be deemed to have been made and all liens on property shall be deemed to have been created in recognition of the power of the state to repeal, alter, and add to statutes providing for liens and exemptions from the enforcement of money judgments.

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Section § 703.070

This law discusses how exemptions apply to judgments for child, family, or spousal support. If property is automatically exempt, it cannot be used to pay these support judgments. However, if the property is claimed exempt in court, the court will decide how much of it can still be used based on everyone's needs and circumstances. The court will issue an order specifying how much of the exempt property can be used to pay the support judgment.

Except as otherwise provided by statute:

(a) The exemptions provided by this chapter or by any other statute apply to a judgment for child, family, or spousal support.

(b) If property is exempt without making a claim, the property is not subject to being applied to the satisfaction of a judgment for child, family, or spousal support.

(c) Except as provided in subdivision (b), if property sought to be applied to the satisfaction of a judgment for child, family, or spousal support is shown to be exempt under subdivision (a) in appropriate proceedings, the court shall, upon noticed motion of the judgment creditor, determine the extent to which the exempt property nevertheless shall be applied to the satisfaction of the judgment. In making this determination, the court shall take into account the needs of the judgment creditor, the needs of the judgment debtor and all the persons the judgment debtor is required to support, and all other relevant circumstances. The court shall effectuate its determination by an order specifying the extent to which the otherwise exempt property is to be applied to the satisfaction of the judgment.

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Section § 703.080

This law explains how funds that are exempt from being claimed by creditors must be tracked if they are deposited into an account or converted into cash. It states that it's the responsibility of the person claiming the exemption to trace these funds. The usual method for tracing is called the 'lowest intermediate balance principle,' but if a different way of tracing would be fairer in a particular case, either the person claiming the exemption or the creditor can suggest it.

(a) Subject to any limitation provided in the particular exemption, a fund that is exempt remains exempt to the extent that it can be traced into deposit accounts or in the form of cash or its equivalent.

(b) The exemption claimant has the burden of tracing an exempt fund.

(c) The tracing of exempt funds in a deposit account shall be by application of the lowest intermediate balance principle unless the exemption claimant or the judgment creditor shows that some other method of tracing would better serve the interests of justice and equity under the circumstances of the case.

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Section § 703.090

This law states that if a creditor doesn't contest a debtor's claim that certain property is exempt within the allowed time or if a court has declared the property exempt, the creditor can't charge subsequent collection costs for pursuing the same debt unless the property is ultimately used to pay off the judgment.

If a judgment creditor has failed to oppose a claim of exemption within the time allowed by Section 703.550 or if property has been determined by a court to be exempt, and the judgment creditor thereafter levies upon or otherwise seeks to apply the property toward the satisfaction of the same money judgment, the judgment creditor is not entitled to recover the subsequent costs of collection unless the property is applied to satisfaction of the judgment.

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Section § 703.100

This law talks about determining whether property is exempt, which means protected from being taken to pay off a debt. It says the exemption status is based on the situation at one of the earliest of three times: when the property is seized, when court proceedings to use the property for a money judgment begin, or when a lien (a legal claim) is created.

However, the court can consider changes that occur after these points but before the hearing, like if the use of the property changes from exempt to nonexempt, if the property's value changes, or if the financial circumstances of the debtor or their family change.

(a) Subject to subdivision (b), the determination whether property is exempt shall be made under the circumstances existing at the earliest of the following times:

(1) The time of levy on the property.

(2) The time of the commencement of court proceedings for the application of the property to the satisfaction of the money judgment.

(3) The time a lien is created under Title 6.5 (commencing with Section 481.010) (attachment) or under this title.

(b) The court, in its discretion, may take into consideration any of the following changes that have occurred between the time of levy or commencement of enforcement proceedings or creation of the lien and the time of the hearing:

(1) A change in the use of the property if the exemption is based upon the use of property and if the property was used for the exempt purpose at the time of the levy or the commencement of enforcement proceedings or the creation of the lien but is used for a nonexempt purpose at the time of the hearing.

(2) A change in the value of the property if the exemption is based upon the value of property.

(3) A change in the financial circumstances of the judgment debtor and spouse and dependents of the judgment debtor if the exemption is based upon their needs.

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Section § 703.110

If you're married and owe a money judgment, you can still use legal exemptions to protect certain property from being used to pay off that debt. These exemptions apply to all kinds of property, whether it's owned separately or together as a couple. No matter if one or both of you owe money, you only get one exemption per law unless it says otherwise.

If the law requires exemptions to be used on property not in court first, it includes both separate and shared property, even if it can't be used to pay the debt. If you and your spouse both claim the same exemption on different items and one of those items is protected, the court will decide what's fair if you can't agree.

If the judgment debtor is married:

(a) The exemptions provided by this chapter or by any other statute apply to all property that is subject to enforcement of a money judgment, including the interest of the spouse of the judgment debtor in community property. The fact that one or both spouses are judgment debtors under the judgment or that property sought to be applied to the satisfaction of the judgment is separate or community does not increase or reduce the number or amount of the exemptions. Where the property exempt under a particular exemption is limited to a specified maximum dollar amount, unless the exemption provision specifically provides otherwise, the two spouses together are entitled to one exemption limited to the specified maximum dollar amount, whether one or both of the spouses are judgment debtors under the judgment and whether the property sought to be applied to the satisfaction of the judgment is separate or community.

(b) If an exemption is required by statute to be applied first to property not before the court and then to property before the court, the application of the exemption to property not before the court shall be made to the community property and separate property of both spouses, whether or not such property is subject to enforcement of the money judgment.

(c) If the same exemption is claimed by the judgment debtor and the spouse of the judgment debtor for different property, and the property claimed by one spouse, but not both, is exempt, the exemption shall be applied as the spouses agree. If the spouses are unable to agree, the exemption shall be applied as directed by the court in its discretion.

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Section § 703.115

This law section explains that when a court is deciding on financial exemptions for a person who owes money (called a judgment debtor), they must consider all assets owned by that person, their spouse, and their dependents. This includes both shared (community) and individually owned (separate) property, whether or not these assets can be used to pay off the debt.

In determining an exemption based upon the needs of the judgment debtor and the spouse and dependents of the judgment debtor or an exemption based upon the needs of the judgment debtor and the family of the judgment debtor, the court shall take into account all property of the judgment debtor and, to the extent the judgment debtor has a spouse and dependents or family, all property of such spouse and dependents or family, including community property and separate property of the spouse, whether or not such property is subject to enforcement of the money judgment.

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Section § 703.130

This California law states that the federal bankruptcy exemptions, specified in the United States Bankruptcy Code under Section 522(d), cannot be used in bankruptcy cases within California. Instead, California has its own set of exemptions for debtors to use when filing for bankruptcy.

Pursuant to the authority of paragraph (2) of subsection (b) of Section 522 of Title 11 of the United States Code, the exemptions set forth in subsection (d) of Section 522 of Title 11 of the United States Code (Bankruptcy) are not authorized in this state.

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Section § 703.140

This section outlines the exemptions available during bankruptcy cases under federal law (Title 11). It gives debtors options on which property they can protect, such as their home, a car, personal items, and retirement plans. Married couples can choose to use their joint exemptions or opt for specific alternative ones. If only one spouse files for bankruptcy and they are living apart, they might need additional documentation to claim certain exemptions, unless they share ownership of a home. Unmarried persons also have options similar to married couples. The law lists different values for various types of property like homes, vehicles, personal items, and tools of the trade that can be protected from creditors. Other protections include insurance benefits and support payments which are essential for living expenses. If a property's value increases during the bankruptcy process and if it was protected by a homestead exemption, this increase is also protected.

(a) In a case under Title 11 of the United States Code, all of the exemptions provided by this chapter, including the homestead exemption, other than the provisions of subdivision (b) are applicable regardless of whether there is a money judgment against the debtor or whether a money judgment is being enforced by execution sale or any other procedure, but the exemptions provided by subdivision (b) may be elected in lieu of all other exemptions provided by this chapter, as follows:

(1) If spouses are joined in the petition, they jointly may elect to utilize the applicable exemption provisions of this chapter other than the provisions of subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.

(2)

(A) If the petition is filed individually, and not jointly, for a spouse, the exemptions provided by this chapter other than the provisions of subdivision (b) are applicable, except that, if both of the spouses effectively waive in writing the right to claim, during the period the case commenced by filing the petition is pending, the exemptions provided by the applicable exemption provisions of this chapter, other than subdivision (b), in any case commenced by filing a petition for either of them under Title 11 of the United States Code, then they may elect to instead utilize the applicable exemptions set forth in subdivision (b).

(B) Notwithstanding subparagraph (A), a waiver is not required from a debtor who is living separate and apart from their spouse as of the date the petition commencing the case under Title 11 of the United States Code is filed, unless, on the petition date, the debtor and the debtor’s spouse shared an ownership interest in property that could be exempted as a homestead under Article 4 of this chapter.

(3) If the petition is filed for an unmarried person, that person may elect to utilize the applicable exemption provisions of this chapter other than subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.

(b) The following exemptions may be elected as provided in subdivision (a):

(1) The debtor’s aggregate interest, not to exceed twenty-nine thousand two hundred seventy-five dollars ($29,275) in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence.

(2) The debtor’s interest, not to exceed seven thousand five hundred dollars ($7,500) in value, in one or more motor vehicles.

(3) The debtor’s interest, not to exceed seven hundred twenty-five dollars ($725) in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(4) The debtor’s aggregate interest, not to exceed one thousand seven hundred fifty dollars ($1,750) in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(5) The debtor’s aggregate interest, not to exceed one thousand five hundred fifty dollars ($1,550) in value, plus any unused amount of the exemption provided under paragraph (1), in any property.

(6) The debtor’s aggregate interest, not to exceed eight thousand seven hundred twenty-five dollars ($8,725) in value, in any implements, professional books, or tools of the trade of the debtor or the trade of a dependent of the debtor.

(7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.

(8) The debtor’s aggregate interest, not to exceed fifteen thousand six hundred fifty dollars ($15,650) in value, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.

(9) Professionally prescribed health aids for the debtor, the debtor’s spouse, or a dependent of the debtor, including vehicles converted for use by the debtor, the debtor’s spouse, or a dependent of the debtor, who has a disability. Conversion of a vehicle for use by a person who has a disability includes altering the interior, installing steering, a wheelchair lift, or motorized steps, or modifying the operation of the vehicle.

(10) The debtor’s right to receive any of the following:

(A) A social security benefit, unemployment compensation, or a local public assistance benefit.

(B) A veterans’ benefit.

(C) A disability, illness, or unemployment benefit.

(D) Alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(E) A payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless all of the following apply:

(i) That plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor’s rights under the plan or contract arose.

(ii) The payment is on account of age or length of service.

(iii) That plan or contract does not qualify under Section 401(a), 403(a), 403(b), 408, or 408A of the Internal Revenue Code of 1986.

(F) The aggregate interest, not to exceed seven thousand five hundred dollars ($7,500), in vacation credits or accrued, or unused, vacation pay, sick leave, family leave, or wages, as defined in Section 200 of the Labor Code.

(11) The debtor’s right to receive, or property that is traceable to, any of the following:

(A) An award under a crime victim’s reparation law.

(B) A payment under a settlement agreement arising out of or regarding the debtor’s employment, to the extent reasonably necessary for the support of the debtor, the debtor’s spouse, or a dependent of the debtor.

(C) A payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(D) A payment under a life insurance contract that insured the life of an individual of whom the debtor was a spouse or dependent on the date of that individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(E) A payment, not to exceed twenty-nine thousand two hundred seventy-five dollars ($29,275) on account of personal bodily injury of the debtor, the debtor’s spouse, or an individual of whom the debtor is a dependent.

(F) A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a spouse or dependent, to the extent reasonably necessary for the support of the debtor and the debtor’s spouse or a dependent of the debtor.

(12) Money held in an account owned by the judgment debtor and established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code), subject to the following limits:

(A) The amount exempted for contributions to an account during the 365-day period prior to the date of filing of the debtor’s petition for bankruptcy, in the aggregate during this period, shall not exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of the filing of the debtor’s petition for bankruptcy.

(B) The amount exempted for contributions to an account during the period commencing 730 days prior to and ending 366 days prior to the date of filing of the debtor’s petition for bankruptcy, in the aggregate during this period, shall not exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of the filing of the debtor’s petition for bankruptcy.

(C) For the purposes of this paragraph, “account” includes all accounts having the same beneficiary.

(D) This paragraph is not subject to the requirements of Section 703.150.

(c) In a case under Title 11 of the United States Code, the value of the property claimed as exempt and the debtor’s exemptions provided by this chapter with respect to such property shall be determined as of the date the bankruptcy petition is filed. In a case where the debtor’s equity in a residence is less than or equal to the amount of the debtor’s allowed homestead exemption as of the date the bankruptcy petition is filed, any appreciation in the value of the debtor’s interest in the property during the pendency of the case is exempt.

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Section § 703.150

This law section outlines how the dollar amounts for certain exemptions are adjusted in California. Every three years, starting April 1st, different sections of the law have their exemption amounts reviewed and potentially increased based on the change in the California Consumer Price Index. These adjustments are rounded to the nearest $25. The Judicial Council is responsible for publishing the updated exemption amounts and their effective dates. Adjustments don't apply to cases that started before the adjustment, except as dictated by federal bankruptcy rules. Specific sections affected include exemptions in subdivision (b) of Section 703.140, Article 3 starting with Section 704.010, and Section 699.730(b)(7).

(a) On April 1, 2004, and at each three-year interval ending on April 1 thereafter, the dollar amounts of exemptions provided in subdivision (b) of Section 703.140 in effect immediately before that date shall be adjusted as provided in subdivision (d).

(b) On April 1, 2007, and at each three-year interval ending on April 1 thereafter, the dollar amounts of exemptions provided in Article 3 (commencing with Section 704.010) in effect immediately before that date shall be adjusted as provided in subdivision (d).

(c) On April 1, 2022, and at each three-year interval ending on April 1 thereafter, the dollar amount set forth in paragraph (7) of subdivision (b) of Section 699.730 in effect immediately before that date shall be adjusted as provided in subdivision (d).

(d) The Judicial Council shall determine the amount of the adjustment based on the change in the annual California Consumer Price Index for All Urban Consumers, published by the Department of Industrial Relations, for the most recent three-year period ending on December 31 preceding the adjustment, with each adjusted amount rounded to the nearest twenty-five dollars ($25).

(e) Beginning April 1, 2004, the Judicial Council shall publish a list of the current dollar amounts of exemptions provided in subdivision (b) of Section 703.140 and in Article 3 (commencing with Section 704.010), and the dollar amount set forth in paragraph (7) of subdivision (b) of Section 699.730, together with the date of the next scheduled adjustment.

(f) Adjustments made under subdivision (a) do not apply with respect to cases commenced before the date of the adjustment, subject to any contrary rule applicable under the federal Bankruptcy Code. The applicability of adjustments made under subdivisions (b), (c), and (d) is governed by Section 703.050.

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Exemptions

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