Tag: california

California bankruptcy exemptions can save your house.

California Homestead Exemption to Save Your Home (2022 update)

Posted by Hale Andrew Antico on January 14, 2022

California Homestead Exemption – 2022 update

The California homestead exemption can help you save your home from creditors. Chapter 7 bankruptcy is liquidation; the bankruptcy trustee can take your stuff. They don’t take the shirt off your back, but at some point they draw the line regarding what you can keep. These are the bankruptcy exemptions, and each state has its own. The California exemptions include a way to protect home equity.

There are two sets of California bankruptcy exemptions. California bankruptcy attorneys call these the 703s and 704s. The California homestead exemption is found in the 704s, at California Code of Civil Procedure 704.730.

2022 update: the 2021 homestead exemption amount adjusts each year, and due to inflation, the 2022 California homestead exemption is now higher. CCP 704.730 (b) says: “The amounts specified in this section shall adjust annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.” In June 2021, the CPI was 297.447, a 4.4% increase from the June the previous year. Applying that factor to the homestead amounts, that would increase both ends of the spectrum to $313,200 and $626,400. As inflation in 2022 is higher yet again, it looks like the 2023 California homestead exemption will be even more than that.

The California Homestead Exemption 2022

In 2021, California homestead exemption increased dramatically. What this means to the person contemplating filing bankruptcy is that more of their home equity can be protected. They really do take houses in Chapter 7 bankruptcy. Previously (see below), the amount of home equity which could be protected was inadequate and hardly kept up with the inflated Calif real estate.

But then in 2020, COVID-19 struck, and people were suddenly unable to pay their rent and mortgages. Partially in response to the pandemic, the state legislature passed and the governor signed a dramatic increase to the California homestead exemption.

The result is a system which depends upon the location where the house is, and has nothing to do with marital status or age. And this makes sense, as a homeowner in Ventura County probably has a higher home value than someone who owns a home in Lancaster. So, now homeowners who’ve lived at a home for 4 years or more get a minimum of $300,000 of home equity protection, and a maximum of $600,000 of California homestead exemption.

Some guidance on the Los Angeles County median home price 2020

Spoiler alert on the above link: The trick is no one knows for sure what the data source for county median is. And if you haven’t lived at the property long enough, you don’t get the above protections. So you will want to consult with a qualified bankruptcy attorney before you risk your house.

The Three Homestead Exemptions in California Before 2021

The California homestead exemption can save your house. — Don’t risk losing your house in Chapter 7. Talk to a experienced bankruptcy attorney about the bankruptcy exemptions and homestead exemption in California.

Firstly, there’s the bankruptcy exemption that a single homeowner gets. This is in subsection (a)(1). In 2020, a single person who lives in a house gets to protect $75,000 of home equity under the California exemptions.

Secondly, there’s a higher exemption for a married person’s residence. This is in (a)(2). The California homestead exemption for a married person is $100,000.

Finally, if you can tick one of three boxes, you get the superduper $175,000 homestead exemption in California’s bankruptcy exemptions. To level-up and qualify for this, you have to either be:

65 years old;
have a disability that prevents gainful employment; or,
55 years old, and make below a certain income level that changes from time to time

This may seem simple, but what is “disabled?” What is “as a result of?” What is the income level, and which time period is measured? You’ll want to speak to a qualified bankruptcy attorney in your area. But in the right circumstances, someone filing consumer bankruptcy can protect a lot more house equity under this third option.

Spouses Sometimes Count

A final note: a good thing about, in particular, the $175,000 California homestead exemption is that it extends to the spouse of the person filing Chapter 7. So if the debtor is, say, 63 years old, but their husband is 67 but really doesn’t want to file bankruptcy, the 63 year old who does file Chapter 7 bankruptcy gets the $175,000 homestead exemption in California anyway.

Be careful in Chapter 7 bankruptcy. It’s not always the best type of bankruptcies.

Learn the differences between Chapter 7 bankruptcy vs 11 vs 13.

Types of Bankruptcies

You really should talk to a qualified Los Angeles bankruptcy lawyer, as you get what you pay for, and it’s not worth risking your home. If you don’t do this right, you’re literally gambling with your house.

California Eviction Moratorium Ends, L.A. Renters Still Protected

Posted by Hale Andrew Antico on September 30, 2021

California Eviction Moratorium Ends, Renters Have Protections

The California eviction moratorium ends September 30. Foreclosures have spiked as those moratoriums ended. Student loan deferment ends January 2022. But for renters, there are still options, particularly locally with Los Angeles County and City of Los Angeles moratoriums on evictions.

How We Got Here: September 30 Deadline

Bill Signed

Back in June, California governor Gavin Newsom signed legislation extending the California eviction moratorium. While federal eviction protections ended last month, California was still protected. The end date for Calif renter protections is September 30, 2021.

Legislature on Break

The COVID-19 Delta variant is running rampant. You’d think that the California state legislature would pass a bill extending the deadline. In June, legislators beat the deadline with days to spare before June 30. However, now, there are just hours to go.

The legislative session ended weeks ago on September 10. So the people California sent to Sacramento are not there to extend the moratorium.

Regardless, it appears that state representatives don’t have the will to extend the protections again. “I believed our eviction protections for tenants should be extended beyond September 30. The Delta variant and the end of many unemployment benefits make that more urgent. Unfortunately, some of my colleagues feel differently, and there’s not consensus for that,” said David Chiu of San Francisco.

So, California’s legislature is out of the picture. This leaves Gov. Newsom as the last hope to extend the landlord restrictions. However, earlier this week, Newsom signed an affordable housing package. Missing in that and his statement was any indication he’d extend the protections.

What Renters Can Do When California Eviction Moratorium Ends

Los Angeles County Eviction Moratorium

First, the Los Angeles County moratorium on evictions is still in place. The Los Angeles County Board of Supervisors extended it to January 31, 2022.

City of Los Angeles Moratorium on Evictions

Also, there’s an LA eviction moratorium protecting renters in the City of Los Angeles until August 1, 2022.

Court Protections for Some California Renters

Further, California renters still have hope. A renter can submit a declaration that they’re unable to pay the full rent. City of Los Angeles renters can apply for relief of 100% of rent and utilities owed. Statewide, beginning Oct 1 and going through March 31, 2022, renters earning 80% of the area median income will be protected by a process through the courts . If facing eviction in state court, renters will need to show evidence they applied for rental assistance, so this is a key step.

Bankruptcy Can Protect Renters in Some Cases

Finally, if there’s the ability to make some sort of monthly payment on back-rent, a Chapter 13 bankruptcy can maybe be an option. Because landlords are sacred cows in bankruptcy, renter protections are thin. But it could mean working out a deal if you have enough income to make normal rent payments, cover living expenses, and still have money left over for catching up quickly.

In short, while not perfect, it seems the best shot for CA renters with the looming end of the California eviction moratorium is the state program. This is not a guarantee that this will protect renters from a future eviction if taken to court. However, it’s at least one measure California renters can take to try to have a defense.

2022 Median Income Limits to Nail Bankruptcy Means Test in Calif

Posted by Hale Andrew Antico on May 15, 2021

Median Income Limits to Nail the Bankruptcy Means Test | New for 2022

The government updated the numbers for 2022 median income limits. Using median household income, it again got easier to qualify for bankruptcy Chapter 7, because of another means test adjustment.

The means test for bankruptcy decides who qualifies for Chapter 7 bankruptcy eligibility. The first step of this process is comparing your median household income against the California median income limits set by the Department Of Justice guidelines to see if you earn less than bankruptcy median income limits.

Update for 2022: The Department of Justice announced in November that it “will not post updated median income totals until a Consumer Price Index adjustment in spring 2022.” Normally it moves the bar that we’re trying to get under twice a year. For the first time in recent memory, there is no Autumn update. This could be good news or bad news, depending on your individual situation.

Because of the above statement, these will be the first 2022 median income limits.

The means test limits adjusts over time. So, someone may not qualify according to the bankruptcy means test in one month but after the changes they do, or vice-verse. The last updates were in May 2021, and are likely changing again in 2022 . Here are the early 2022 bankruptcy median income figures to determine who can file Chapter 7 bankruptcy.

Means Test: 2022 Median Income Adjustments

Every now and then, the government updates the bankruptcy median income limits. They last did it in May 2021. Good news: the California 2022 median income numbers are now even higher, increasing household income for bankruptcy means test qualifying. This means that more people could qualify for Chapter 7 bankruptcy using the California median income numbers below.

2022 Median Income for California Households

Because the California median income changes maybe once or twice a year, these recent changes late last year will be the first numbers used for 2022 median income. You’ll see below there’s talk about household size. Notice also that larger families also get a break, as the amount for each additional member after 4 increases another $9,000. This is helpful for households of five people or more.

What is Median Household Income

When reviewing median household income, we start splitting hairs, since not every home is a traditional household. So, things start getting kind of cloudy on what is or isn’t a household. It isn’t always clear who counts in a household. There may be a difference if you have a roommate who pays rent. What if you’re married? Or have kids but they’re adults. Do you live with your significant other, who has their own finances? Would the answer be different if you had kids together, but weren’t married? Maybe they’d all be considered by the government to be in your household. Or, maybe they’re not. Call and let’s meet to talk about it.

But below are the California median income limits for the various household sizes.

California household size and California median income for Bankruptcy

1-person household: $62,171
2-person household: $82,418
3-person household: $91,605
4-person household: $105,232
Each additional person: $9,000

These are the California median income numbers as of early 2022. If it’s later in the year or you’re looking for the median household income for a different state, please review the DOJ link above.

Read Our Means Test Guide.

Means Test Guide

Can you file bankruptcy if your household income is over the median?

If you’re over the bankruptcy median, there’s still hope

Yes. The means test and 2022 median income isn’t the “end all be all.” It’s just a starting point. A person can still file Chapter 7 bankruptcy, in some cases, even if they earn more than the median income. The bankruptcy means test would just need to be filled out completely. It’s still possible to qualify.

Over the years, this Los Angeles bankruptcy attorney has helped people who earn over the California median income limits still qualify for Chapter 7. In one case, we even helped a family whose annual income was almost double the median household income. They were earning around $150,000 a year, and we helped them get a Chapter 7 discharge (your mileage may vary). However, even if someone isn’t eligible, there is still a way out of debt in Chapter 13.

Being Under the Bankruptcy Median Income Doesn’t Guarantee Success

On the other hand, just because someone is earning less than the California median income, it’s possible that they’re not eligible for Chapter 7 bankruptcy. Bankruptcy is all about whether someone can afford to repay their debt or not, and the means test is just one factor.

Note: the median income numbers are not to be confused with the Los Angeles County median home price figures, and each has a different place in evaluating Chapter 7.

Finally, as the economy is always changing, so does California median household income. We don’t know the next time changes to the median income limits will happen again. So, be sure to check before relying on these California median income limits in the future.

Contact Us and Let’s Find out If you Qualify

Los Angeles County Median Home Price (2022)

Posted by Hale Andrew Antico on February 1, 2021

Los Angeles County Median Home Price (2022)

The Los Angeles County median home price in 2022 can be tricky to determine. There are different sources that say different things. It’s not clear which of the many options will be relied upon by courts and trustees for the California homestead exemption.

Warning: This is provided as information only, and is not legal advice. If you are thinking of filing bankruptcy, do not rely upon any information on this webpage. You are assuming all risk and are literally gambling with your home. You will have only yourself to blame if you use the wrong numbers for the Los Angeles County median home value.

See a bankruptcy attorney for more updated information before you file.

Average is not Median

los angeles county median home value — The Los Angeles County median home value is not the mean

Before we can determine what the Los Angeles County median home price is, we’ll need to know what it’s not. A median is not the same as the average. This takes us back to high school math, but a quick couple of definitions:

Average (or mean): this is where you add up the data, and then divide by the number of data points
Median: this is where you list all the data, and then take the number which is at the midpoint

So, as you can see, the median is not the same as the L.A. County average home value.

The Median Changes Over Time

Because the median is the midpoint of all the data, each time there’s another home sale, the median changes and moves. You may figure with a random distribution of data, there would be an equal likelihood that future sales will be about half above and half below the median, keeping the median the same. But home prices change over time and are not static, and particularly during a virus pandemic like the COVID-19 coronavirus we had in 2020 and 2021.

For example, you might find some data sources that list the median home prices for last year, but only through December. Can you assume that houses would sell for the same prices in December around the holidays as they do during the summer when people move a lot and kids are usually out of school?

Read Our Means Test Guide on Median Income Limits.

Median Income Guide

The Los Angeles County median home price is not the same as that for the L.A. area

Los Angeles County is one of the largest counties in the United States, with over 4,000 square miles. While you may find data for the metropolitan area, that’s very different than the numbers for Los Angeles County. Why? Because L.A County goes from South Bay all the way up to the Antelope Valley and Lancaster. The Los Angeles County median home price is pulling together data from all these.

Los Angeles County is home to about 10,000,000 people, while the city of L.A. has “only” 4,000,000. If you use only city data, you’re missing out on home values in remote areas in LA County like Littlerock and Pearblossom on the 138 and on the way to Vegas.

The Median Home Value is not the same as Median Home Sales Price

You can find some sites which average the values of the homes in the L.A. area, or even Los Angeles County. The problem with that is this: you’re using their own estimate about the Los Angeles county median home values, even those that didn’t sell, when what you’re really needing is the sales price of homes that actually sold.

After reviewing all the above, you can see that we’re looking for a very specific thing here, and no one website reports the Los Angeles County median home price, or has information that in 2022 is depended upon reliably as the “go to” source for Los Angeles County median home value information. Over time, maybe one place will emerge, but for now there’s just a few “almost there” entries.

Some Data Sources Which are Close

which data source can provide the los angeles county median home price — Which of the various data sources is the right one?

With all that being said, you can understand the challenge of finding the Los Angeles County median home price. Most websites are using averages, some have only the L.A. area, and none of them let you have access to the data of all the home sales so you can calculate the median yourself.

Zillow: this company is famous for using its proprietary “Zestimate” to approximate home values. For example, if you go here, you can find what Zillow calls “the typical home value of homes in Los Angeles.”

But that number isn’t clear…. What does “typical” mean – average or median? Remember, they’re different. Home value or home price? There’s no indication this is relying on sales data. And for what time period? Now, at this snapshot in time, last month, this year, or last year?

The website doesn’t say what the Los Angeles County median home price is. It also doesn’t say if it includes single-family homes, is only single-family homes, or something else.

Realtor: This website features real estate, but if you dig down deep enough, you can find market data, research, and trends. It provides data by month, not year, and appears to be providing listing prices, not sales prices.

Redfin: Redfin is another national real estate website, which tracks listings and sales, and helps connect home buyers to realtors. It has market data and trends, but seems to be restricted to only Los Angeles city, not all of Los Angeles county median home price info.

CAR: The California Association of Realtors also has some market data. But it cautions that the data which it is using comes from over 90 associations and counts “single family detached homes only” and “median price changes may exhibit unusual fluctuation.”

Trulia: Similarly, Trulia is a real estate website that tracks home sales and house prices. It has a way to filter for L.A. and show market information at the bottom of the page, but doesn’t show Los Angeles county median home price or value info. It appears to list home values the way Zillow does, but it doesn’t appear to be relying on sales data.

News reports: You may find news reports from Los Angeles-based newspapers that report data on home sales prices.

Note: you may find some websites that provide spreadsheets of Los Angeles County median home price data, and lists medians by month. Taking the median of the medians isn’t the same as the median of all the sales data. It’s just creating garbage data. To find the true Los Angeles County median, you’d have to have access to all the sales data. This is something very few people have.

And that’s the problem: no one person has the data, and different places which are close report different numbers for the Los Angeles county median home value.

While some of these are close, none of these seem to provide “the” number. Not one can be relied upon, especially for something which involves risking your home.

Summing up Los Angeles County median home price

Is there one bottom line source? No, and honestly, a lot of us are trying to sift through all this information to make sense of it. Maybe in the months ahead, one choice will crystalize as the one we all rely upon.

This will likely be after litigation and people guess wrong. Sadly, they will lose their homes in some cases because they guessed wrong on home value. Currently, there is not one number that we can reliably “bet the house” is the median home price in Los Angeles County.

Be very cautious, use this at your own risk, and best of luck to you in your future.

Contact us

If you’re in Los Angeles County, request a case evaluation, which we can set up by Zoom.

California Median Income Hits New High

Posted by Hale Andrew Antico on March 15, 2020

California Median Income Reaches Historic Milestones

The California median income is a good guide to how well residents in the Golden State are doing financially. The California economy (until this week’s Coronavirus outbreak) was sitting pretty, and its citizens are earning income. The numbers used to qualify for a “straight bankruptcy” have broken some very notable milestones.

Recent California Median Income

Starting on April 1, 2020, median income for a household of one in Calif has broken the $60,000 threshold. The median income for a household of one in the Golden State is now $60,360.

Even more amazing, a family of four has a California median income of $101,315. This is the first time in recent memory, if ever, that a median household of four in Calif has earned six figures.

The significance of these numbers — $60,000 and $100,000 — applies to bankruptcy. The Department of Justice uses numbers from the Census as a preliminary measuring stick. They’re used to assess whether a debtor or debtors qualify for Chapter 7 bankruptcy. Not everyone is eligible, with the alternative being debt repayment with high income. In theory, people earning $60,000 and $100,000 would ave a relatively easy time doing a bankruptcy and not repaying their debt.

See our median income article for a more thorough explanation. Also, you’ll find updated numbers, and the median income amounts used for other household sizes. The values change frequently, and by the time you read this page may have gone down due to COVID-19’s impact on the economy, so check that link for the latest amounts.