There are quite a few different exemptions, but the more common ones are:
*75% of any monies in a bank account which constitute wages paid in the last 30 days (C.C.P. 704.070)
*Retirement exemptions (For things like IRA’s/401ks and other retirement assets) (C.C.P. 704.115)]
(This is an especially complicated one which applies differently to different types of retirements, and in some cases requires analysis of debtor finances, to determine if a retirement asset is “necessary for retirement” given debtors likely situation at retirement age. This is a hard thing to figure out, and is done usually on limited evidence- hence, the results can be dicey.)
*Social Security/Disability/Government Assistance Money (C.C.P. 704.080 and others)
*NEW AUTOMATIC General Deposit Account Exemption if levied account gets Social Security deposited into it (C.C.P. 708.080(d) & (e))
(This is an especially dangerous one because it is AUTOMATIC– Debtor needs to file nothing and do nothing. If the bank reports back to the sheriff that Social Security goes into the levied account, the sheriff notifies the creditor by mail, and creditor has FIVE DAYS (plus five days for mail) to respond- and if Creditor does not file a response in that time- the entire amount of money levied on, no matter how much it is- may get back to the debtor. If this happens, good luck ever seeing it again.)
Other less common exemptions include personal injury settlements (up to a certain amount), tools of trade, certain personal effects (clothes off someone’s back, for example). A complete list of exemptions can be found on Form EJ-155. There are too many to name and deal with separately.
The most important things to know about contesting exemptions:
-Creditor has very limited time to contest, in most cases 15 days (C.C.P. 703.550), but in some cases, as few as 5 days;
-Failure of creditor contesting exemption properly and fast enough, means all the property is released, even if the exemption claim is totally bogus, it will win automatically (C.C.P. 703.550)
–Creditor must get a hearing on calendar with the Court within 30 days of filing its response (C.C.P. 703.570)
*The code doesn’t say what happens if the hearing is not held timely, but the sheriff would most likely default to releasing the money.
-Debtor ALWAYS has the burden of proving the exemption claim (C.C.P. 703.580)
Some exemption case law (Updated periodically):
Nothing is exempt unless specifically stated by statute; Court may not make new exemptions as it pleases. (Hammond v. Hoskins)
Non-ERISA qualified private retirement plans of debtors solely owned corporation can be totally exempt! (In Re Cheng)
But, Debtor has to treat his solo retirement plans as true retirement plans, otherwise, they are not exempt! (In re Simpson)
Exemption hearings can range from fairly simple (Social Security) to very not simple (Retirement). Procedurally however, the timeframes and hearing requirements are very short and very irregular, and as a result, exemption claims are hard to navigate with the Courts, who are used to normal motion timelines and procedures. For example, many courts do not even allow creditors to get a hearing date within the 30 days required, and special procedures need to be used, hard to reach supervisors at the courthouse need to be contacted and pursued, etc.
Exemptions are also ever changing, and COVID-19 resulted in massive changes in favor of Debtors in multiple respects. Los Angeles Collection Attorneys since 2011, The Evanns Collection Law Firm has been enforcing judgments for years and knows the ins and outs of exemptions and keeps up with all changing laws. Phone calls are always free and no obligation. Call now at 213-292-6888.