The California legislature passed S.B. 832 to update its homestead exemption for consumer debtors. The law's major provisions include:
1) Making the homestead exemption the greater of $300,000 or the countywide median sale price of a single-family home in the calendar year prior to the year in which the judgement debtor claims the exemption, not to exceed $600,000
2) Adjusting annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.
"This homestead exemption increase is long overdue," said bankruptcy attorney Jenny Doling of J. Doling Law PC (Palm Desert, Calif.). "It represents the median priced home in California, not a home of great value, just the average family home. Further, if a debtor’s home is sold and the debtor is paid the value of the homestead, the debtor only has 6 months to roll the funds into a new homestead or the debtor loses those funds.” The previous California law prescribed that the amount of the homestead exemption was either $75,000, $100,000, or $175,000, depending on certain characteristics of the homestead’s residents. Having passed both the California Senate and Assembly, S.B. 832 is expected to be signed by Gov. Newsom soon and will go into effect immediately. Click here to read the bill text.
