BILL ANALYSIS �
AB 1945
Page 1
ASSEMBLY THIRD READING
AB 1945 (Wieckowski)
As Amended March 28, 2014
Majority vote
JUDICIARY 10-0
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|Ayes:|Wieckowski, Wagner, | | |
| |Alejo, Chau, Dickinson, | | |
| |Garcia, Gorell, | | |
| |Maienschein, Muratsuchi, | | |
| |Stone | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Clarifies the availability of specified property
exemptions to the domestic partner of a judgment debtor.
Specifically, this bill provides that, in the case of community
property, the domestic partner of the judgment debtor may claim
exemptions from enforcement of judgment whether or not he or she
is also a judgment debtor under the judgment.
EXISTING LAW :
1)Specifies 21 different types of property and the conditions
under and amount of which a judgment debtor may claim an
exemption from enforcement of a money judgment. (Code of
Civil Procedure (CCP) Section 704 exemptions.)
2)Provides eleven categories of exemptions, modeled after
federal law (11 United States Code (U.S.C.) Section 522,
subdivision (d)) which the bankruptcy debtor may elect to
claim instead of the Section 704 exemptions described above.
These exemptions include, among other things, the debtor's
interest in real property, motor vehicles, jewelry, and tools
of the trade, up to specified amounts. (CCP Section 703
exemptions.)
3)Permits, in all cases, the judgment debtor or a person acting
on behalf of the judgment debtor to claim any of these
exemptions, and in the case of community property, the spouse
of the judgment debtor, whether or not the spouse is also a
judgment debtor under the judgment.
AB 1945
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4)Provides that registered domestic partners shall have the same
rights, protections, and benefits, and shall be subject to the
same responsibilities, obligations, and duties under law,
whether they derive from statutes, administrative regulations,
court rules, government policies, common law, or any other
provisions or sources of law, as are granted to and imposed
upon spouses.
FISCAL EFFECT : None
COMMENTS : According to the author, this bill provides helpful
clarification of existing law on the issue of whether registered
domestic partners can file jointly in bankruptcy and claim the
same property exemptions that spouses in a marriage can.
Specifically, this bill clarifies that, in the case of community
property, the domestic partner of a judgment debtor may claim
exemptions from enforcement of judgment whether or not he or she
is also a judgment debtor under the judgment.
Both the federal Bankruptcy Code and California law provide
numerous exemptions that are intended to save bankruptcy debtors
and their families from extreme hardship. "The fundamental
purpose behind exemptions in bankruptcy is to ensure that the
debtor is not left destitute and dependent upon the public purse
after distribution of his assets to creditors. Along with the
discharge of debts, exemptions are the principal means by which
the bankruptcy proceeding allows the debtor to rehabilitate
himself and his family financially. Thus, exemptions provide
the debtor with a fresh start, and 'shift the burden of
providing the debtor with minimal financial support from society
to the debtor's creditors.'" (Exemptions Under the Bankruptcy
Code: Using California's New Homestead Law as a Medium for
Analysis. 72 California Law Review 922 (1984)).
Under state law, California bankruptcy debtors have two sets of
exemption options to choose from, one set of state law
nonbankruptcy exemptions (CCP Section 704 exemptions) and a
second set modeled after federal bankruptcy exemptions (CCP
Section 703 exemptions); however, the debtor may choose only one
set of exemptions. (In re Steward, 9th Cir. BAP (Cal.) 1998,
227 B.R. 895.) With respect to a debtor's eligibility to claim
property exemptions, current state law does not expressly
authorize registered domestic partners to claim the exemptions.
AB 1945
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Specifically, CCP Section 703.020 authorizes the exemptions only
for the debtor, and in the case of community property, for the
spouse of the judgment debtor whether or not the spouse is also
a judgment debtor under the judgment. Family Code Section
297.5, however, provides that registered domestic partners have
the same rights, protections and benefits, and shall be subject
to the same responsibilities, obligations, and duties under law,
as are granted to and imposed upon spouses. By logical
extension, registered domestic partners are entitled to claim
the property exemptions in the same manner as spouses under
existing law, including in cases of community property when the
partners have filed jointly in bankruptcy.
According to the author, this bill is needed to eliminate
reported uncertainty as to whether domestic partners may jointly
file for bankruptcy and claim the same property exemptions as
married couples. The author notes that in 2011, the United
States (U.S.) Bankruptcy Court of the Central District of
California (CA) in 2011 held that same-sex individuals lawfully
married under state law are entitled to file a joint bankruptcy
petition, despite the contrary command of the federal Defense of
Marriage Act (DOMA). To uphold the definition of marriage under
DOMA in this case and deny the joint petition, the court
concluded, would have violated the debtors' equal protection
rights under the Fifth Amendment, either under heightened
scrutiny or under rational basis review (In re Balas, 449 BR 567
(Case No. 2:11-bk-17831 TD)). The subsequent invalidation of
DOMA by the U.S. Supreme Court in 2013 may have helped eliminate
any distinction between same-sex and opposite-sex marriages, but
according to the author, some uncertainty remains as to the
rights of registered domestic partners to jointly file for
bankruptcy under existing law.
Accordingly, this bill amends CCP Section 703.020 to codify
existing law that permits domestic partners to file jointly for
bankruptcy and entitles the domestic partner of the debtor to
claim the same property exemptions that a spouse may claim.
Because the spouse of the judgment debtor may claim exemptions
whether or not the spouse is also a judgment debtor under the
judgment, similarly this bill would allow the domestic partner
of the debtor to claim exemptions whether or not the domestic
partner is also a judgment debtor under the judgment.
AB 1945
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Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
FN: 0003195