When filing for bankruptcy, you may need to liquidate assets to repay debts. However, each state allows people to retain certain items and funds, whether they file for Chapter 7 or Chapter 13 bankruptcy. The pieces of property you are allowed to keep are called exemptions. The state of California permits residents to choose between two sets of bankruptcy exemptions instead of following federal guidelines. Californians can select Section 704 or Section 703 to protect certain types of property. The following guide outlines what these codes allow people to keep.

What You Are Allowed to Keep When Filing Bankruptcy

Section 704

The Section 704 exemption covers homesteads, personal property, wages, and pension or benefit plans. For example, you may keep real or personal homestead property up to $75,000 if you’re single and not disabled, or $100,000 if you have a family and no one else has a stake in the home. If you’re over 65 or physically or mentally disabled, or if creditors are attempting to sell your home forcibly, you may be entitled to homestead property of up to $175,000.

You may also be able to keep jewelry, personal heirlooms, and artwork up to $3,200 in value. Other exemptions include health aids, food, clothing, appliances and furnishings, building materials up to $3,2000 in value, and burial plots. An experienced lawyer will help you evaluate your property to determine whether a Section 704 exemption is the best course of action.

Section 703

There is one crucial distinction between Sections 703 and 704. Those who choose Section 703 exemptions when filing bankruptcy have the option of a wildcard exemption. This stipulation protects the value of any asset—whether it’s a boat, retirement savings, or inheritance—up to $28,000.

This makes Section 703 a desirable option for people with diverse assets they’d like to keep, but which don’t fall within the 704 exemption categories. However, the Section 704 homestead exemption is much larger. Ultimately, the most appropriate option depends your unique needs and property portfolio. 

Filing for bankruptcy doesn’t have to mean losing everything. If you’re not sure what you can keep, then talk to an experienced attorney who can help. The team at Mark Briden Law in Redding, CA, handles both Chapter 7 and Chapter 13 bankruptcy cases, and they will explain your exemption options. To schedule a complimentary consultation, call (530) 222-1664. The consultation may be conducted over the phone or in person. To learn more about the firm’s services, visit their website.