AB 1853, as introduced, Wieckowski. Debtor exemptions.
Existing law provides prohibits the seller or holder of a conditional sale contract for a motor vehicle from accelerating the maturity of any part or all of the amount due under the contract or repossessing the vehicle in the absence of default in the performance of any of the buyer’s obligations under the contract.
This bill would provide that neither the act of filing a bankruptcy petition by the buyer or other individual liable on the contract nor the status of either of those persons as a debtor in bankruptcy constitutes a default in the performance of any of the buyer’s obligations under the contract and neither may be used as a basis for accelerating the maturity of any part or all of the amount due under the contract or for repossessing the motor vehicle.
Existing law identifies various types of property of a judgment debtor that are exempt from the enforcement of a money judgment. Existing law provides that property described in statute as exempt may be claimed within the time and in the manner prescribed in the applicable enforcement procedure, and property described in statute as exempt without making a claim is not subject to any procedure for enforcement of a money judgment. These general exemptions are available to a debtor in a federal bankruptcy case, whether a money judgment is being enforced by execution sale or other procedure, unless the debtor elects certain alternative exemptions.
Existing law authorizes a husband and wife who jointly file a bankruptcy petition to jointly elect to utilize the general exemptions or the alternative exemptions, but not both. The general exemptions are applicable if a bankruptcy petition is filed individually, and not jointly, for a husband or a wife, except that the husband and wife may jointly waive in writing their right to claim, during the period the case commenced by filing the petition is pending, the general exemptions and instead elect to utilize the alternative exemptions.
This bill would provide that a joint waiver is not required from a debtor who is separated from his or her spouse as of the date the bankruptcy petition is filed.
This bill would require, for purposes of determining the exemptions that are available to the debtor in a federal bankruptcy case, that the value of the debtor’s interest in property be determined as of the date the bankruptcy petition is filed. The bill would provide an exemption for the debtor’s entire interest in the property, including any appreciation in value of that interest following the date the bankruptcy petition is filed, if the value of the debtor’s interest in the property on the date the petition is filed is less than or equal to the amount the debtor is permitted to exempt.
Existing law includes an alternative exemption for the debtor’s right to receive 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 several specified conditions apply, including that the plan or contract does not qualify under specified provisions of the federal Internal Revenue Code of 1986.
This bill would provide that a plan or contract covered by this alternative exemption would be exempt even if it did not qualify under the specified provisions of the federal Internal Revenue Code of 1986 so long as the sole basis for the failure to qualify is a technical defect.
Existing law includes alternative exemptions for the debtor’s right to receive, or property that is traceable to, a payment on account of the wrongful death of an individual of whom the debtor was a dependent and a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of that individual’s death.
This bill would make these exemptions applicable, as well, to payments regarding an individual of whom the debtor was a spouse.
Existing law includes an alternative exemption for the debtor’s right to receive, or property that is traceable to, a payment up to $24,060 on account of personal bodily injury of the debtor or an individual of whom the debtor is a dependent.
This bill would make this exemption applicable, as well, to a payment on account of personal bodily injury of the spouse of the debtor.
Existing law includes an alternative exemption for the debtor’s right to receive, or property that is traceable to, a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent to the extent reasonably necessary for the support of the debtor and a dependent of the debtor.
This bill would make this exemption applicable, as well, to a payment regarding an individual of whom the debtor is or was a spouse, and would provide that the exemption applies to the extent reasonably necessary for the support of the debtor and a spouse or dependent of the debtor.
Existing law provides that the benefits from a matured life insurance policy, including an endowment or annuity policy, are exempt to the extent reasonably necessary for the support of the debtor and the spouse and dependents of the debtor.
This bill would expand this exemption to include an aggregate amount of benefits up to $500,000 plus any amount that is reasonably necessary for the support of the debtor and his or her spouse and dependents. The bill also would add an alternative exemption for the debtor’s interest in these expanded benefits.
Existing law provides that vacation credits, as defined, are exempt from enforcement of a money judgment without making a claim.
This bill would delete the definition of “vacation credits” set forth in these provisions and expand this general exemption to also include accrued or unused vacation pay. The bill also would add an alternative exemption for the debtor’s right to receive these expanded assets.
Existing law provides that up to $2,300 of any combination of aggregate equity in motor vehicles, the proceeds of an execution sale of a motor vehicle, and the proceeds of insurance or other indemnification for the loss, damage, or destruction of a motor vehicle, is exempt. Existing law includes an alternative exemption for up to $4,800 of the debtor’s interest in one or more motor vehicles.
This bill would increase the amount of the general and alternative exemption for motor vehicle equity to $6,000, and make conforming changes.
This bill would provide that the aggregate interest of a debtor who is engaged in business, not to exceed five thousand dollars ($5,000), in cash or deposit accounts, accounts receivable, and inventory of the business is exempt.
Existing law includes an alternative exemption for the debtor’s right to receive alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
This bill would provide that these assets are exempt, thereby adding a general exemption matching the existing alternative exemption.
Existing law provides that all amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are exempt. Existing law defines “private retirement plan” to include self-employed retirement plans and individual retirement annuities or accounts provided for in the federal Internal Revenue Code of 1986, including individual retirement accounts qualified under specified provisions of that code.
This bill would expand this exemption to also include individual retirement accounts that do not qualify under those specified provisions on the basis of a technical defect alone.
Existing law provides that various causes of action and awards of damages or settlements arising out of those actions are exempt to various extents, as specified.
This bill would provide that a cause of action arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt without making a claim, except as provided in specified statutory provisions, and an award of damages or a settlement arising out of or regarding the violation of any law relating to the judgment debtor’s employment is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor. The bill also would add identical alternative exemptions in this regard.
Existing law provides that the proceeds of sale or of insurance or other indemnification for damage or destruction of a homestead, the proceeds received as compensation for a homestead acquired for public use, or the proceeds from a voluntary sale of a declared homestead, are exempt in the amount of the homestead exemption provided in a specified statute for a period of six months after the time the proceeds are actually received by the judgment debtor, except as provided.
This bill would delete the six-month limitation on these exemptions, thereby making these proceeds exempt indefinitely, and make conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 2983.3 of the Civil Code is amended to
2read:
(a) begin insert(1)end insertbegin insert end insert In the absence of default in the performance
4of any of the buyer’s obligations under the contract, the seller or
5holder may not accelerate the maturity of any part or all of the
6amount due thereunder or repossess the motor vehicle.
7(2) Neither the act of filing a petition commencing a case for
8bankruptcy under Title 11 of the United States Code by the buyer
9or other individual liable on the contract
nor the status of either
10of those persons as a debtor in bankruptcy constitutes a default in
11the performance of any of the buyer’s obligations under the
12contract, and neither may be used as a basis for accelerating the
13maturity of any part or all of the amount due under the contract
14or for repossessing the motor vehicle.
15(b) If after default by the buyer, the seller or holder repossesses
16or voluntarily accepts surrender of the motor vehicle, any person
17liable on the contract shall have a right to reinstate the contract
18and the seller or holder shall not accelerate the maturity of any
19part or all of the contract prior to expiration of the right to reinstate,
20unless the seller or holder reasonably and in good faith determines
21that any of the following has occurred:
22(1) The buyer or any other person liable on the contract by
23omission or commission
intentionally provided false or misleading
24information of material importance on his or her credit application.
25(2) The buyer, any other person liable on the contract, or any
26permissive user in possession of the motor vehicle, in order to
P6 1avoid repossession has concealed the motor vehicle or removed it
2from the state.
3(3) The buyer, any other person liable on the contract, or any
4permissive user in possession of the motor vehicle, has committed
5or threatens to commit acts of destruction, or has failed to take
6care of the motor vehicle in a reasonable manner, so that the motor
7vehicle has become substantially impaired in value, or the buyer,
8any other person liable on the contract, or any nonoccasional
9permissive user in possession of the motor vehicle has failed to
10take care of the motor vehicle in a reasonable manner, so that the
11motor vehicle may become substantially impaired in
value.
12(4) The buyer or any other person liable on the contract has
13committed, attempted to commit, or threatened to commit criminal
14acts of violence or bodily harm against an agent, employee, or
15officer of the seller or holder in connection with the seller’s or
16holder’s repossession of or attempt to repossess the motor vehicle.
17(5) The buyer has knowingly used the motor vehicle, or has
18knowingly permitted it to be used, in connection with the
19commission of a criminal offense, other than an infraction, as a
20consequence of which the motor vehicle has been seized by a
21federal, state, or local agency or authority pursuant to federal, state,
22or local law.
23(6) The motor vehicle has been seized by a federal, state, or
24local public agency or authority pursuant to (A) Section 1324 of
25Title 8 of the United States Code or Part
274 of Title 8 of the Code
26of Federal Regulations, (B) Section 881 of Title 21 of the United
27States Code or Part 9 of Title 28 of the Code of Federal
28Regulations, or (C) other federal, state, or local law, including
29regulations, and, pursuant to that other law, the seizing authority,
30as a precondition to the return of the motor vehicle to the seller or
31holder, prohibits the return of the motor vehicle to the buyer or
32other person liable on the contract or any third person claiming
33the motor vehicle by or through them or otherwise effects or
34requires the termination of the property rights in the motor vehicle
35of the buyer or other person liable on the contract or claimants by
36or through them.
37(c) Exercise of the right to reinstate the contract shall be limited
38to once in any 12-month period and twice during the term of the
39contract.
P7 1(d) The provisions of this subdivision cover the
method by
2which a contract shall be reinstated with respect to curing events
3of default which were a ground for repossession or occurred
4subsequent to repossession:
5(1) Where the default is the result of the buyer’s failure to make
6any payment due under the contract, the buyer or any other person
7liable on the contract shall make the defaulted payments and pay
8any applicable delinquency charges.
9(2) Where the default is the result of the buyer’s failure to keep
10and maintain the motor vehicle free from all encumbrances and
11liens of every kind, the buyer or any other person liable on the
12contract shall either satisfy all encumbrances and liens or, in the
13event the seller or holder satisfies the encumbrances and liens, the
14buyer or any other person liable on the contract shall reimburse
15the seller or holder for all reasonable costs and expenses incurred
16therefor.
17(3) Where the default is the result of the buyer’s failure to keep
18and maintain insurance on the motor vehicle, the buyer or any
19other person liable on the contract shall either obtain the insurance
20or, in the event the seller or holder has obtained the insurance, the
21buyer or any other person liable on the contract shall reimburse
22the seller or holder for premiums paid and all reasonable costs and
23expenses, including, but not limited to, any finance charge in
24connection with the premiums permitted by Section 2982.8,
25incurred therefor.
26(4) Where the default is the result of the buyer’s failure to
27perform any other obligation under the contract, unless the seller
28or holder has made a good faith determination that the default is
29so substantial as to be incurable, the buyer or any other person
30liable on the contract shall either cure the default or, if the seller
31or holder has performed
the obligation, reimburse the seller or
32holder for all reasonable costs and expenses incurred in connection
33therewith.
34(5) Additionally, the buyer or any other person liable on the
35contract shall, in all cases, reimburse the seller or holder for all
36reasonable and necessary collection and repossession costs and
37fees incurred, including attorney’s fees and legal expenses
38expended in retaking and holding the vehicle.
39(e) If the seller or holder denies the right to reinstatement under
40subdivision (b) or paragraph (4) of subdivision (d), the seller or
P8 1holder shall have the burden of proof that the denial was justified
2in that it was reasonable and made in good faith. If the seller or
3holder fails to sustain the burden of proof, the seller or holder shall
4not be entitled to a deficiency, but it shall not be presumed that
5the buyer is entitled to damages by reason of the failure of the
6
seller or holder to sustain the burden of proof.
7(f) This section shall not apply to a loan made by a lender
8licensed under Division 9 (commencing with Section 22000)begin delete or of the Financial
9Division 10 (commencing with Section 24000)end delete
10Code.
Section 703.140 of the Code of Civil Procedure is
12amended to read:
(a) In a case under Title 11 of the United States Code,
14all of the exemptions provided by this chapter, including the
15homestead exemption, other than the provisions of subdivision (b)
16are applicable regardless of whether there is a money judgment
17against the debtor or whether a money judgment is being enforced
18by execution sale or any other procedure, but the exemptions
19provided by subdivision (b) may be elected in lieu of all other
20exemptions provided by this chapter, as follows:
21(1) If a husband and wife are joined in the petition, they jointly
22may elect to utilize the applicable exemption provisions of this
23chapter other than the provisions of subdivision (b), or to utilize
24the applicable exemptions set forth in subdivision (b), but not both.
25(2) If the petition is filed individually, and not jointly, for a
26husband or a wife, the exemptions provided by this chapter other
27than the provisions of subdivision (b) are applicable, except that,
28if both the husband and the wife effectively waive in writing the
29right to claim, during the period the case commenced by filing the
30petition is pending, the exemptions provided by the applicable
31exemption provisions of this chapter, other than subdivision (b),
32in any case commenced by filing a petition for either of them under
33Title 11 of the United States Code, then they may elect to instead
34utilize the applicable exemptions set forth in subdivision (b).begin insert A
35waiver is not required, however, from a debtor who is separated
36from his or her spouse as of the date the petition commencing the
37case under Title 11 of the United States Code is filed.end insert
38(3) If the petition is filed for an unmarried person, that person
39may elect to utilize the applicable exemption provisions of this
P9 1chapter other than subdivision (b), or to utilize the applicable
2exemptions set forth in subdivision (b), but not both.
3(4) For purposes of determining the exemptions available to
4the debtor in a case under Title 11 of the United States Code, the
5value of the debtor’s interest in property shall be determined as
6of the date the petition commencing the case is filed. If the value
7of the debtor’s interest in the property on that date is less than or
8equal to the amount the debtor is permitted to exempt, the debtor’s
9entire interest in the property, including any appreciation in value
10of that interest following the date of the petition, is exempt.
11(b) The following exemptions may be elected as provided in
12subdivision (a):
13(1) The debtor’s aggregate interest, not to exceed twenty-four
14thousand sixty dollars ($24,060) in value, in real property or
15personal property that the debtor or a dependent of the debtor uses
16as a residence, in a cooperative that owns property that the debtor
17or a dependent of the debtor uses as a residence.
18(2) The debtor’s interest, not to exceedbegin delete fourend deletebegin insert sixend insert thousandbegin delete eight dollars
19hundredend deletebegin delete ($4,800)end deletebegin insert
($6,000)end insert in value, in one or more motor
20vehicles.
21(3) The debtor’s interest, not to exceed six hundred dollars
22($600) in value in any particular item, in household furnishings,
23household goods, wearing apparel, appliances, books, animals,
24crops, or musical instruments, that are held primarily for the
25personal, family, or household use of the debtor or a dependent of
26the debtor.
27(4) The debtor’s aggregate interest, not to exceed one thousand
28four hundred twenty-five dollars ($1,425) in value, in jewelry held
29primarily for the personal, family, or household use of the debtor
30or a dependent of the debtor.
31(5) The debtor’s aggregate interest, not to exceed in value one
32thousand two hundred eighty dollars ($1,280) plus any unused
33amount of the exemption provided under paragraph (1),
in any
34property.
35(6) The debtor’s aggregate interest, not to exceed seven thousand
36one hundred seventy-five dollars ($7,175) in value, in any
37implements, professional books, or tools of the trade of the debtor
38or the trade of a dependent of the debtor.
39(7) Any unmatured life insurance contract owned by the debtor,
40other than a credit life insurance contract.
P10 1(8) The debtor’s aggregate interest, not to exceed in value twelve
2thousand eight hundred sixty dollars ($12,860), in any accrued
3dividend or interest under, or loan value of, any unmatured life
4insurance contract owned by the debtor under which the insured
5is the debtor or an individual of whom the debtor is a dependent.
6(9) The debtor’s aggregate interest, not to exceed five hundred
7thousand dollars ($500,000) plus any amount that is reasonably
8necessary for the support of the judgment debtor and his or her
9spouse and dependents, in benefits from a matured life insurance
10policy, including an endowment or annuity policy.
11(9)
end delete
12begin insert(10)end insert Professionally prescribed health aids for the debtor or a
13dependent of the debtor.
14(10)
end delete15begin insert(11)end insert The debtor’s right to receive any of the following:
16(A) A social security benefit, unemployment compensation, or
17a local public assistance benefit.
18(B) A veterans’ benefit.
19(C) A disability, illness, or unemployment benefit.
20(D) Alimony, support, or separate maintenance, to the extent
21reasonably necessary for the support of the debtor and any
22dependent of the debtor.
23(E) A
payment under a stock bonus, pension, profit-sharing,
24annuity, or similar plan or contract on account of illness, disability,
25death, age, or length of service, to the extent reasonably necessary
26for the support of the debtor and any dependent of the debtor,
27unless all of the following apply:
28(i) That plan or contract was established by or under the auspices
29of an insider that employed the debtor at the time the debtor’s
30rights under the plan or contract arose.
31(ii) The payment is on account of age or length of service.
32(iii) That plan or contract does not qualify under Section 401(a),
33403(a), 403(b), 408, or 408A of the Internal Revenue Code of
34begin delete 1986.end deletebegin insert 1986 on a basis other than a technical defect alone.end insert
35(F) Vacation credits or accrued or unused vacation pay.
end insert36(11)
end delete
37begin insert(12)end insert The debtor’s right to receive, or property that is traceable
38to, any of the following:
39(A) An award under a crime victim’s reparation law.
P11 1(B) A payment on account of the wrongful death of an individual
2of whom the debtor was abegin insert spouse orend insert dependent, to the extent
3reasonably necessary for the support of the debtor and any
4dependent of the debtor.
5(C) A payment under a life insurance contract that
insured the
6life of an individual of whom the debtor was abegin insert spouse orend insert dependent
7on the date of that individual’s death, to the extent reasonably
8necessary for the support of the debtor and any dependent of the
9debtor.
10(D) A payment, not to exceed twenty-four thousand sixty dollars
11($24,060), on account of personal bodily injury of thebegin delete debtorend delete
12begin insert debtor, the spouse of the debtor,end insert or an individual of whom the
13debtor is a dependent.
14(E) A payment in compensation of loss of future earnings of
15the debtor or an individual of whom the debtor is or was abegin insert spouse
16orend insert dependent, to the extent reasonably necessary for the support
17of the debtor andbegin delete anyend deletebegin insert a spouse orend insert dependent of the debtor.
18(13) (A) Except as provided in Article 5 (commencing with
19Section 708.410) of Chapter 6, a cause of action arising out of or
20regarding the violation of any law relating to the judgment debtor’s
21employment is exempt without making a claim.
22(B) An award of damages from or a settlement arising out of
23or regarding the violation of any law relating to the judgment
24debtor’s employment is exempt to the extent necessary for the
25support of the judgment debtor and the spouse and
dependents of
26the judgment debtor.
Section 704.010 of the Code of Civil Procedure is
28amended to read:
(a) Any combination of the following is exempt in
30the amount ofbegin delete twoend deletebegin insert sixend insert thousandbegin delete threeend deletebegin delete hundredend delete dollarsbegin delete ($2,300):end delete
31begin insert ($6,000):end insert
32(1) The aggregate equity in motor vehicles.
33(2) The proceeds of an execution sale of a motor vehicle.
34(3) The proceeds of insurance or other indemnification for the
35loss, damage, or destruction of a motor vehicle.
36(b) Proceeds exempt under subdivision (a) are exempt for a
37period of 90 days after the time the proceeds are actually received
38by the judgment debtor.
39(c) For the purpose of determining the equity, the fair market
40value of a motor vehicle shall be determined by reference to used
P12 1car price guides
customarily used by California automobile dealers
2unless the motor vehicle is not listed in such price guides.
3(d) If the judgment debtor has only one motor vehicle and it is
4sold at an execution sale, the proceeds of the execution sale are
5exempt in the amount ofbegin delete twoend deletebegin insert sixend insert thousandbegin delete threeend deletebegin delete hundredend delete dollars
6begin delete ($2,300)end deletebegin insert ($6,000)end insert without making a claim. The levying officer
7shall consult and may rely upon the records of the Department of
8Motor Vehicles in determining whether the judgment debtor has
9only one motor vehicle. In the case covered by this subdivision,
10the exemption provided by subdivision (a) is not available.
Section 704.085 is added to the Code of Civil
12Procedure, to read:
The aggregate interest of a debtor who is engaged in
14business, not to exceed five thousand dollars ($5,000), in cash or
15deposit accounts, accounts receivable, and inventory of the business
16is exempt.
Section 704.100 of the Code of Civil Procedure is
18amended to read:
(a) Unmatured life insurancebegin delete policies (includingend delete
20begin insert policies, includingend insert endowmentbegin delete andend deletebegin insert orend insert annuitybegin delete policies), but notend delete
21begin insert policies, excludingend insert the loan value ofbegin delete suchend deletebegin insert theend insert policies, are exempt
22without making a claim.
23(b) The aggregate loan value of unmatured life insurancebegin delete policies begin insert policies, includingend insert endowment
24(includingend deletebegin delete andend deletebegin insert orend insert annuitybegin delete policies) begin insert policies, isend insert subject to the enforcement of a money judgment but
25isend delete
26is exempt in the amount of nine thousand seven hundred dollars
27($9,700). If the judgment debtor is married, each spouse is entitled
28to a separate exemption under this subdivision, and the exemptions
29of the spouses may be combined, regardless of whether the policies
30belong to either or both spouses and regardless of whether the
31spouse of the judgment debtor is also a judgment debtor under the
32judgment. The exemption provided by this subdivision shall be
33first applied to policies other than the policy before the court and
34then, if the exemption is not exhausted, to the policy before the
35court.
36(c) Benefits from matured life insurancebegin delete policies (includingend delete
37begin insert policies, includingend insert endowment and annuitybegin delete policies)end deletebegin insert policies,end insert are
38exemptbegin insert in an aggregate amount notend insert tobegin delete the extentend deletebegin insert exceed five
39hundred thousand dollars ($500,000) plus any amountend insert reasonably
P13 1necessary for the support of the judgment debtor and the spouse
2and dependents of the judgment debtor.
Section 704.111 is added to the Code of Civil
4Procedure, to read:
Alimony, support, and separate maintenance, to the
6extent reasonably necessary for the support of the debtor and any
7dependent of the debtor, are exempt.
Section 704.113 of the Code of Civil Procedure is
9amended to read:
11(a) As used in this section, “vacation credits” means vacation
12credits accumulated by a state employee pursuant to Section 18050
13of the Government Code or by any other public employee pursuant
14to any law for the accumulation of vacation credits applicable to
15the employee.
16(b)
end delete
17begin insert(a)end insert All vacation creditsbegin delete areend deletebegin insert or accrued or unused vacation pay
18isend insert exempt without making a claim.
19(c)
end delete
20begin insert(b)end insert Amounts paid periodically or as a lump sum representing
21vacation credits are subject to any earnings withholding order
22served under Chapter 5 (commencing with Section 706.010) or
23any earnings assignment order for support as defined in Section
24706.011 and are exempt to the same extent as earnings of a
25judgment debtor.
Section 704.115 of the Code of Civil Procedure is
27amended to read:
(a) As used in this section, “private retirement plan”
29means:
30(1) Private retirement plans, including, but not limited to, union
31retirement plans.
32(2) Profit-sharing plans designed and used for retirement
33purposes.
34(3) Self-employed retirement plans and individual retirement
35annuities or accounts provided for in the Internal Revenue Code
36of 1986, as amended, including individual retirement accounts
37qualified under Section 408 or 408A of thatbegin delete code,end deletebegin insert code and
38accounts that do not qualify on the basis of a technical defect
39alone,end insert to the extent the amounts held in the plans, annuities, or
P14 1accounts do not exceed the maximum amounts exempt from federal
2income taxation under that code.
3(b) All amounts held, controlled, or in process of distribution
4by a private retirement plan, for the payment of benefits as an
5annuity, pension, retirement allowance, disability payment, or
6death benefit from a private retirement plan are exempt.
7(c) Notwithstanding subdivision (b), where an amount described
8in subdivision (b) becomes payable to a person and is sought to
9be applied to the satisfaction of a judgment for child, family, or
10spousal support against that person:
11(1) Except as provided in paragraph (2), the amount is exempt
12only to the extent that the court determines under subdivision (c)
13of Section 703.070.
14(2) If the amount sought to be applied to the satisfaction of the
15judgment is payable periodically, the amount payable is subject
16to an earnings assignment order for support as defined in Section
17706.011 or any other applicable enforcement procedure, but the
18amount to be withheld pursuant to the assignment order or other
19procedure shall not exceed the amount permitted to be withheld
20on an earnings withholding order for support under Section
21706.052.
22(d) After payment, the amounts described in subdivision (b)
23and all contributions and interest thereon returned to any member
24of a private retirement plan are exempt.
25(e) Notwithstanding subdivisions (b) and (d), except as provided
26in subdivision (f), the amounts described in paragraph (3) of
27subdivision (a) are exempt only to the extent necessary to provide
28for the support of the judgment debtor when the judgment debtor
29retires and for the support of the spouse and dependents of the
30judgment debtor, taking into account all resources that are likely
31to be available for the support of the judgment debtor when the
32judgment debtor retires. In determining the amount to be exempt
33under this subdivision, the court shall allow the judgment debtor
34such additional amount as is necessary to pay any federal and state
35income taxes payable as a result of the applying of an amount
36described in paragraph (3) of subdivision (a) to the satisfaction of
37the money judgment.
38(f) Where the amounts described in paragraph (3) of subdivision
39(a) are payable periodically, the amount of the periodic payment
40that may be
applied to the satisfaction of a money judgment is the
P15 1amount that may be withheld from a like amount of earnings under
2Chapter 5 (commencing with Section 706.010) (Wage Garnishment
3Law). To the extent a lump-sum distribution from an individual
4retirement account is treated differently from a periodic distribution
5under this subdivision, any lump-sum distribution from an account
6qualified under Section 408A of the Internal Revenue Code shall
7be treated the same as a lump-sum distribution from an account
8qualified under Section 408 of the Internal Revenue Code for
9purposes of determining whether any of that payment may be
10applied to the satisfaction of a money judgment.
Section 704.165 is added to the Code of Civil
12Procedure, to read:
(a) Except as provided in Article 5 (commencing
14with Section 708.410) of Chapter 6, a cause of action arising out
15of or regarding the violation of any law relating to the judgment
16debtor’s employment is exempt without making a claim.
17(b) An award of damages from or a settlement arising out of or
18regarding the violation of any law relating to the judgment debtor’s
19employment is exempt to the extent necessary for the support of
20the judgment debtor and the spouse and dependents of the judgment
21debtor.
Section 704.720 of the Code of Civil Procedure is
23amended to read:
(a) A homestead is exempt from sale under this
25division to the extent provided in Section 704.800.
26(b) If a homestead is sold under this division or is damaged or
27destroyed or is acquired for public use, the proceeds of sale or of
28insurance or other indemnification for damage or destruction of
29the homestead or the proceeds received as compensation for a
30homestead acquired for public use are exempt in the amount of
31the homestead exemption provided in Section 704.730.begin delete The
32proceeds are exempt for a period of six months after the time the
33proceeds are actually received by the judgment debtor, except that,
34if a homestead exemption is applied to other property of the
35judgment debtor or the judgment debtor’s spouse during that
36period, the proceeds thereafter are not exempt.end delete
37(c) If the judgment debtor and spouse of the judgment debtor
38reside in separate homesteads, only the homestead of one of the
39spouses is exempt and only the proceeds of the exempt homestead
40are exempt.
P16 1(d) If a judgment debtor is not currently residing in the
2homestead, but his or her separated or former spouse continues to
3reside in or exercise control over possession of the homestead, that
4judgment debtor continues to be entitled to an exemption under
5this article until entry of judgment or other legally enforceable
6
agreement dividing the community property between the judgment
7debtor and the separated or former spouse, or until a later time
8period as specified by court order. Nothing in this subdivision shall
9entitle the judgment debtor to more than one exempt homestead.
10Notwithstanding subdivision (d) of Section 704.710, for purposes
11of this article, “spouse” may include a separated or former spouse
12consistent with this subdivision.
Section 704.960 of the Code of Civil Procedure is
14amended to read:
begin delete(a)end deletebegin delete end deleteIf a declared homestead is voluntarily sold, the
16proceeds of sale are exempt in the amount provided by Section
17begin delete 704.730 for a period of six months after the date of saleend deletebegin insert 704.730end insert.
18(b) If the proceeds of a declared homestead are invested in a
19new dwelling within six months after the date of a voluntary sale
20or within six months after proceeds of an execution sale or of
21insurance or other indemnification for damage or destruction are
22received, the new dwelling may be selected as a declared
23homestead by recording a homestead declaration within the
24applicable six-month period. In such case, the homestead
25declaration has the same effect as if it had been recorded at the
26time the prior homestead declaration was recorded.
O
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