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  • Writer's pictureMichellePattersonLaw

Bill to Increase California's Homestead Exemption

The California Legislature recently passed Assembly Bill No. 1885 (AB 1885), which will amend the State's current homestead exemption law to increase the exemption for California homeowners to a county-based structure, allowing an exemption of at least $300,000, with a maximum of $600,000, based on the countywide median sales price for single-family homes as of the year before the exemption is claimed.

The next step is for Governor Newsom to sign the bill. This law firm e-mailed Gov. Newsom to express its support in AB 1885. If you wish to do the same, you may e-mail a brief letter expressing your support to

What the New Bill Means for Bankruptcy Filers.

In the case of Bankruptcy, specifically a Chapter 7 Bankruptcy, the current homestead exemption system allows a Bankruptcy debtor to exempt from liquidation either $75,000, $100,000, or $175,000 in the value of their home, depending on a number of factors. Meaning, if you are a homeowner in Bankruptcy, only $75,000, $100,000, or $175,000 of your home's value is exempt from liquidation. Oftentimes, when this 3-tiered structure is explained to home owners seeking a financial fresh start through a Chapter 7 Bankruptcy, the result is a fear of homelessness to potential Chapter 7 debtors who are current on their mortgage payments, but drowning in high-interest credit card and medical debt.

Are there other options? Yes. Other options include Chapter 13, refinance, debt consolidation, or debt settlement. But most of the homeowners that come to this office seeking a Chapter 7 Bankruptcy are individuals living on modest income, due to their age, mental or physical disability, or loss of employment. A Chapter 13 reorganization, refinance, debt consolidation, or debt settlement, is not an option.

Under AB 1885, by allowing an exemption of at least $300,000 in home values, individuals who own their homes in the State of California, who are current on their mortgage payments, but living on modest income and drowning in debt, could be eligible to participate in the Chapter 7 Bankruptcy system, without the fear of homelessness as an end result.

If you wish to e-mail Gov. Newsom expressing your support and encourage him to sign AB 1885 into action, send your e-mailed support to

Michelle Patterson Law

101 W. Broadway, Suite 1770

San Diego, CA 92101

(p) 619-630-5282

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