• Home
  • Bankruptcy in Brief
  • ABC’s of Bankruptcy
  • Considering Bankruptcy
  • True Stories
  • Chapter 13
  • Blog
  • About
  • TOC

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box
  • How bankruptcy works
  • Mortgage Matters
  • Consumer Rights
  • You & Your Lawyer
  • Small Business
  • Family Law

No More Repossession Threat If Exemption Bill Passes

By Cathy Moran

tow-truck-309953_640_optWhat Congress took away ten years ago, the California legislature may give back if SB 308 becomes law.

When the Bankruptcy Code was amended in 2005, Congress gifted the car finance industry with a plum:  those who filed bankruptcy could no longer make their car payments  after bankruptcy and count on keeping their cars.

Instead debtors were faced with giving up their bankruptcy discharge as to the car loan or giving up their car to the lender.

Without a reaffirmation agreement, bankruptcy filers had to worry that they’d come out some morning and find their car repoed, even when the payments were current.

Hardly seems fair, but, hey, this was the auto lobby and Congress.

Keep and pay may return

The California Assembly takes up a bill this month that would prohibit car lenders from declaring a car loan in default just because the borrower filed bankruptcy.

The borrower has to keep paying for the car if she wants to keep it, but she doesn’t have to give up the bankruptcy discharge of the car loan to do so.

The return of ride-through is just one of the long needed provisions of Senator Bob Wieckowski’s bill to improve California exemptions.

Other standout changes proposed by the bill include:

  • A $5000 exemption for the inventory, cash, or receivables of a sole proprietor
  • Elimination of reinvestment provision that makes the homestead vanish if you don’t buy a new house
  • Protection for alimony or family support to the extent necessary for support
  • Wiping out the need for one spouse to get the other’s permission to use California bankruptcy exemptions
  • Increasing the exempt value of a car to $6000

Potholes ahead

Of course, monied interests and those who make their money selling the assets of debtors oppose these improvements in California exemptions.

The first test of SB 308 in the Assembly is expected June 30th in the Judiciary Committee.  The bill has already passed the California Senate.

The members of the Judiciary Committee are:

  • Mark Stone
  • Donald Wagner
  • Luis Alejo
  • Ed Chau
  • David Chiu
  • James Gallagher
  • Cristina Garcia
  • Chris Holden
  • Brian Maienschein
  • Patrick O’Donnell

You can find your assembly representative here.  Voter input on S.B. 308 has to be in by June 25th.

Got an opinion?  Get in contact.

More from the Soapbox

  • Word rant:  seizure of mortgaged homesWord rant: seizure of mortgaged homes
  • Does Marriage Make Me Liable For My Spouse’s DebtsDoes Marriage Make Me Liable For My Spouse’s Debts
  • Doing The Means Test YourselfDoing The Means Test Yourself
  • Get A Bankruptcy Discharge Even Without Making All Your PaymentsGet A Bankruptcy Discharge Even Without Making All Your Payments
  • Oakland Bankruptcy Judge Upheld At 9th CircuitOakland Bankruptcy Judge Upheld At 9th Circuit

Filed Under: Strictly California

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Bankruptcy Basics

About The Soapbox

You’ve arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said “try”).

Here, I allow myself to tell stories and express strong opinions. We dig deeper into how to consider bankruptcy and navigate a bankruptcy case.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

When Can I File Bankruptcy Again

Remember the old high school cheer:  two, four, six, eight, who do we appreciate? Turns out, that's not just a cheer, it's shorthand for the rule on when you can file bankruptcy again. And it points out that when you can file again depends on what kind of bankruptcy you filed last time. Here's how it … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700
Phone: (650) 368-4700

Categories

All content copyright © Moran Law Group. All rights reserved.