California Bankruptcy Exemptions 2025: What You Keep

You want to know what property you can keep when filing bankruptcy in California. Your home, car, and personal belongings matter for your fresh start.

Bankruptcy exemptions protect your essential assets during Chapter 7. Most California cases are no-asset cases. The trustee doesn’t take or sell your property to repay creditors.

Confused Which California Exemption System Protects Your Assets Best?

Choosing between Section 703 and Section 704 exemptions determines what you keep. Connect with a bankruptcy attorney who reviews your home equity, vehicle, and personal property to recommend the right system for your fresh start.

Speak With Attorney

California’s exemption laws help you keep what you need to rebuild your life.

Can You Use Federal Bankruptcy Exemptions in California?

California is an opt-out state. You cannot use federal bankruptcy exemptions here.

You must choose between two California exemption systems: Section 703 or Section 704. You need to have lived in California for at least two years before filing.

You can only pick one system. You cannot mix exemptions from both lists.

California exemptions are typically more generous than federal ones. You may still qualify for certain federal nonbankruptcy exemptions. These cover federal retirement benefits or military survivor benefits.

Section 703 vs Section 704: Which System Should You Choose?

California bankruptcy law gives you two exemption options. Each system protects different amounts of property.

Here’s how the two systems compare:

Property Type	Section 703 Amount	Section 704 Amount
Homestead (Home Equity)	$36,750	$361,076–$722,507 (varies by county)
Motor Vehicle	$8,625	$8,625
Wildcard	$1,950 + unused homestead up to $36,750	None
Household Items	$925 per item	Fully exempt if necessary

Choose Section 704 if you have significant home equity. Choose Section 703 if you need wildcard flexibility for cash or other property.

If you’re unsure which system works best for your situation, speak with a bankruptcy attorney for free to review your assets.

California Homestead Exemption: Protect Your Home

Your homestead exemption protects equity in your primary residence. The amount depends on which system you choose.

Section 704 Homestead Protection

Section 704 offers substantial protection based on county median home prices. For 2025, you can protect between $361,076 and $722,507 in home equity.

The exemption covers houses, condos, mobile homes, and boats you live in.

Most California filers with high home equity choose Section 704.

Section 703 Homestead Protection

Section 703 provides a flat $36,750 homestead exemption. You can apply the unused portion to other property through the wildcard exemption.

Filers with little or no home equity often prefer Section 703. The flexibility helps protect cash, bank accounts, or other valuable items.

Legal references: California Code of Civil Procedure §§ 704.730, 703.140(b)(1)

Wildcard Exemption: Protect Cash and Other Property

The wildcard exemption protects assets that don’t fit other categories. You can use it for cash, bank balances, or valuable personal items.

Section 703 Wildcard

Section 703 gives you a $1,950 wildcard exemption. You can add any unused homestead or burial exemption. Your total wildcard can reach $36,750.

Many filers choose Section 703 specifically for this flexibility.

Section 704 Has No Wildcard

Section 704 doesn’t include a wildcard exemption. You can only protect property within specific categories like home equity or vehicles.

If you have property outside these categories, Section 703 offers better protection.

Legal reference: California Code of Civil Procedure § 703.140(b)(5)

Motor Vehicle Exemption: Keep Your Car

Both exemption systems protect up to $8,625 in vehicle equity for 2025.

Section 703 limits you to one vehicle. Section 704 lets you split the exemption across multiple vehicles if needed.

You can also use the tools of trade exemption if your vehicle is necessary for work. Section 703 filers can add wildcard protection for additional vehicle equity.

Legal references: California Code of Civil Procedure §§ 703.140(b)(2), 704.010, 704.060

Personal Property You Can Keep: Section 704

Section 704 protects these items:

Residential building materials up to $3,500 for home repairs
Heirlooms, jewelry, and artwork up to $8,725
Health aids, prosthetic devices, and orthopedic appliances (fully exempt)
Clothing, food, appliances, and furnishings (exempt if reasonably necessary, unless extraordinary value)
Bank deposits from Social Security up to $3,500 ($5,250 for spouses), unlimited if not commingled
Bank deposits from other public benefits up to $1,750 ($2,600 for spouses)
Tools of trade up to $8,000 ($15,975 for spouses in same occupation)
Cemetery plots and burial spaces (fully exempt)
Personal injury and wrongful death claims necessary for support (fully exempt)

Personal Property You Can Keep: Section 703

Section 703 protects these items:

Tools of trade up to $8,000
Clothing, appliances, household goods, furnishings, books, animals, musical instruments, and crops up to $725 per item
Jewelry for personal or family use up to $1,750
Health aids (fully exempt)
Personal injury recoveries up to $29,275
Wrongful death recoveries necessary for support (fully exempt)

Retirement Accounts and Pensions

Both exemption systems protect retirement savings.

Section 704 Retirement Protection

Tax-exempt retirement accounts (401(k)s, 403(b)s, profit-sharing plans, SEPs, Simple IRAs) are fully protected under 11 U.S.C. § 522
IRAs and Roth IRAs are exempt up to the federal limit under 11 U.S.C. § 522(b)(3)(C)
Public retirement benefits (Section 704.110)
Private retirement benefits including IRAs and Keoghs (Section 704.115)
Public employee pensions (California Government Codes 21255, 31452, 32210, 31913)

Section 703 Retirement Protection

Tax-exempt retirement accounts are fully protected under 11 U.S.C. § 522
IRAs and Roth IRAs are exempt up to the federal limit under 11 U.S.C. § 522(b)(3)(C)(n)
ERISA-qualified benefits necessary for support (Section 703.140(b)(10))

Insurance Benefits and Life Insurance

Section 704 Insurance Exemptions

Matured life insurance benefits needed for support (fully exempt)
Unmatured life insurance policy up to $13,975 (Section 704.100)
Fraternal unemployment benefits (Section 704.120)
Disability and health benefits (Section 704.130)
Fraternal benefit society benefits (Section 704.170)

Section 703 Insurance Exemptions

Unmatured life insurance policies (Section 703.140(b)(7))
Life insurance proceeds needed for support (Section 703.140(b)(11))
Disability benefits (Section 703.140)

Public Benefits and Government Assistance

Section 704 Public Benefits

Unemployment benefits and union benefits from labor disputes (Section 704.120)
Workers’ compensation (Section 704.160)
Aid to elderly, blind, and disabled (Section 704.170)
Relocation benefits (Section 704.180)
Financial aid to students (Section 704.190)

Section 703 Public Benefits

Unemployment compensation, veterans’ benefits, Social Security, public assistance (Section 703.140(b)(10))
Crime victim compensation (Section 703.140(b)(11))

Other California Exemptions

Section 704 Additional Exemptions

Inmate trust funds up to $1,750 (Section 704.090)
Business partnership property (Corp. 16501)
Applicable California federal non-bankruptcy exemptions

Section 703 Additional Exemptions

Stock bonus, annuity, or profit-sharing payments for disability, illness, or age (Section 703.140(b)(10)(E))
Applicable California federal non-bankruptcy exemptions

Getting Help With Your California Bankruptcy

Choosing the right exemption system protects your assets. An experienced bankruptcy attorney reviews your property and recommends the best option.

Most California Chapter 7 cases result in debtors keeping all their property. You deserve a fresh start with the essentials you need to rebuild.

Frequently Asked Questions

What is the difference between Section 703 and Section 704 California bankruptcy exemptions?

Section 704 offers higher homestead protection ranging from $361,076 to $722,507 based on your county's median home prices. Section 703 provides a $36,750 homestead exemption but includes a wildcard exemption up to $36,750 that can protect cash, bank accounts, or other property. You must choose one system and cannot mix exemptions from both.

Can I use federal bankruptcy exemptions in California?

No. California is an opt-out state, which means you cannot use federal bankruptcy exemptions. You must use either California's Section 703 or Section 704 exemption system. However, you may still qualify for certain federal nonbankruptcy exemptions for items like federal retirement benefits.

How much home equity can I protect in California bankruptcy?

Your homestead exemption depends on which system you choose. Section 704 protects between $361,076 and $722,507 in home equity based on your county's median home prices. Section 703 protects $36,750 in home equity, but you can apply any unused portion to other property through the wildcard exemption.

What is California's wildcard exemption?

The wildcard exemption is only available under Section 703. It starts at $1,950 and can increase up to $36,750 total if you don't use the full homestead or burial exemptions. You can use the wildcard to protect cash, bank account balances, or valuable personal items that don't fit other exemption categories.

How much vehicle equity can I protect in California bankruptcy?

Both Section 703 and Section 704 protect up to $8,625 in vehicle equity as of 2025. Section 703 limits this to one vehicle, while Section 704 allows you to split the exemption across multiple vehicles. You can also use the tools of trade exemption if your vehicle is necessary for work.

California Bankruptcy Exemptions: What You Can Keep in 2025