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Your Legal Corner - Client Alert Blog

Long Awaited Increase in California's Homestead Exemption

Written By: Melissa C. Marsh, Esq., California Attorney, November 2009 Add to Favorites
California's homestead exemption laws protect the amount of equity a homeowner can shield from a judgment creditor, and from all creditors while in bankruptcy. See, California Code of Civil Procedure sections 703.010 and 704.730.

Effective January 1, 2010, the California homestead exemption protecting a homeowner’s equity from a judgment creditor (or bankruptcy) will be increased by $25,000 as follows:

  1. $75,000 for individuals,
  2. $100,000 for married couples, and
  3. $175,000 for individuals who are age 65 or older, disabled, or age 55 older with a limited income as specified.
The homestead exemption in California protects the debtor/home owner’s equity up to the amount of the exemption, even if the home is sold. So, even if your home is sold to satisfy a judgment creditor (other than your mortgage lender), you the home owner will first be paid the amount of the homestead exemption.

How the Homestead Exemption Works in a Nutshell. If a judgment creditor is able to collect against your personal residence by placing your home up for auction, after the home sells the first person to be paid is the home owner's mortgage lender. The second person to be paid is the homeowner (the amount of the homestead exemption). It is only after both the mortgage lender and the home owner have been paid, that a judgment creditor will be entitled to any remaining equity. Consequently, a judge will be ill disposed to allow a judgment creditor to foreclose on a home unless there is credible proof that the home has sufficient equity not only to pay off the mortgage lender, but also the amount of the home owner's exemption and all of the fees and expenses attendant to such a sale.


Tags: california homestead, california homestead exemption
Posted In: Business Law Bulletin  Corporate Client Bulletin  Real Estate Reporter 


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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.


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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.