Bankruptcy’s means test is a paper tiger in the San Francisco Bay Area. Really! You can see why few Bay Area residents are constrained by the means test when you compare the latest median income figures used in the means test with the allowed cost of rental housing here. To review: Congress in 2005 tried to write […]
Title Isn’t Everything: Watch Out For The Assets In Your Spouse’s Name
Your spouse’s assets can get swept up in your bankruptcy when you live in California. Because, most likely, just holding an asset in the name of one spouse doesn’t defeat the community property presumption. I saw it play out in a first meeting of creditors when the bankruptcy trustee asked about an asset. But it’s […]
Separate Finances Didn’t Protect Spouse From Financial Disaster
By keeping separate finances, this California couple thought they had insulated the wife from the financial woes of her entrepreneur husband. They didn’t share bank accounts nor credit cards while she carefully kept her distance from his business dealings. Her name was not on anything tied to his business. But “separate” isn’t enough to overcome […]
Do I qualify for bankruptcy in the Bay Area?
The higher-than-average wages in the Bay Area don’t disqualify you from bankruptcy, despite rampant misinformation about the bankruptcy means test. The means test, added to bankruptcy law in 2005, was (poorly) designed to keep above-average earners out of bankruptcy. But it hasn’t worked in the Bay Area, largely because of the cost of housing here. […]
California Exemptions Increase for 2025
New 2025 California exemption amounts becomes effective April 1, 2025. And it’s no joke. The new exemption numbers will protect more value in cash and assets necessary for everyday living. Exemptions define the assets that are safe from creditors in bankruptcy. The California exemptions found in CCP 704 exemptions are also available outside of bankruptcy […]
7 Principles of California Community Property
Baffled by California community property? Think it makes you personally liable for the debts of your spouse? Lots of people do. But it doesn’t. California has been a community property state since it became a state in 1850. You would think we’d have gotten the hang of it long ago. But the community property system […]
What Happens To Cash In Bankruptcy?
How much cash can you keep when you file bankruptcy? It’s not as though you won’t have living expenses after you file bankruptcy. You need to know how you’ll manage and what you’ll have to manage with. Funding that fresh start is what exemptions are all about. We are talking here about California because exemptions, […]
California Homestead Exemption: The Truth Isn’t What You Think
“They can’t take my house, whatever happens. Right?” The young man in my office “knew” how the California homestead works: he insisted that his home was exempt as a California homestead, even if he filed bankruptcy. He “knew” that credit card debt was dischargeable. And that “knowledge” lead to his conviction that , in bankruptcy, […]
New California Homestead Numbers For 2025
2026 homestead numbers It’s time to check out the California homestead numbers for 2025. The 2021 expanded California homestead not only brought the exemption closer to the real cost of housing, it provided for annual adjustments for inflation. The original legislation created a $300,000 floor on the exemption and a $600,000 cap for homeowners, based […]
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