How Much is the CCP 740 Homestead Exemption in CA?

Question from JT, How Much is the CCP 740 Homestead Exemption in CA?

Answer from AI:

In a Chapter 7 bankruptcy in California, the debtor can use the California Code of Civil Procedure (CCP) Section 704.730, commonly referred to as the “CCP 740 exemption,” to protect the equity in their home. However, the amount of this exemption can be affected by how long the debtor has lived in the home.

Understanding the Homestead Exemption

The homestead exemption is designed to protect a certain amount of equity in a debtor’s primary residence from creditors during bankruptcy. In California, there are two sets of exemptions: the CCP 704 series and the CCP 703 series. The CCP 704 series is often used by those who wish to protect their home equity.

Residency Requirement and Federal Cap

If a debtor has not resided in their home for at least 1,215 days (approximately 3 years and 4 months) before filing for bankruptcy, a federal cap may limit the amount of the homestead exemption. This cap is part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).

Federal Cap: As of the latest updates, the federal cap is $189,050. This means that if the debtor has not lived in the home for the required 1,215 days, the maximum exemption they can claim is limited to this amount, regardless of the state exemption amount.

California Homestead Exemption Amounts

As of 2021, the California homestead exemption amounts are as follows:

• Minimum of $300,000
• Maximum of $600,000, depending on the county’s median home price

These amounts are adjusted annually for inflation. However, if the federal cap applies, the debtor may only exempt up to $189,050 if they haven’t met the residency requirement.

Steps to Determine Your Exemption

1. Verify how long you have lived in your home.
2. Check the current federal cap amount, as it may change periodically.
3. Determine the applicable California homestead exemption amount based on your county’s median home price.
4. Consult with a bankruptcy attorney to understand how these rules apply to your specific situation.

When to Seek Legal Advice

Given the complexity of bankruptcy laws and the potential impact on your financial situation, it is crucial to consult with a legal professional. An attorney can provide personalized advice and help navigate the nuances of both federal and state laws.

For more detailed information, you can refer to the [California Code of Civil Procedure Section 704.730](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=704.730.&lawCode=CCP) and the [Bankruptcy Abuse Prevention and Consumer Protection Act of 2005](https://www.congress.gov/bill/109th-congress/senate-bill/256).

Understanding these rules can help you make informed decisions about protecting your home in bankruptcy.