California Bankruptcy Guide

Exemptions, median income, courts & attorneys

California has some of the most debtor-friendly bankruptcy exemptions in the United States, with homestead protection ranging from $600,000 to $700,000 depending on the county. This comprehensive guide covers everything you need to know about filing bankruptcy in California, including median income requirements, exemptions, bankruptcy courts, and how to find qualified attorneys.

California Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in California, your household income must be below these median income levels:

Household Size	Annual Median Income	Monthly Median Income
1 person	$67,169	$5,597
2 people	$87,273	$7,273
3 people	$99,140	$8,262
4 people	$112,686	$9,391
5 people	$121,686	$10,141
6 people	$130,686	$10,891

Note: For households larger than 4 people, add $9,000 per additional person. These figures are updated annually by the IRS and reflect 2026 data.

Above the Median? If your income exceeds California's median, you may still qualify for Chapter 7 by passing the means test's second part, which calculates your disposable income after allowable expenses. If you don't qualify for Chapter 7, Chapter 13 may be an option.

Calculate Your California Eligibility

California Bankruptcy Exemptions

California is unique because it offers two different sets of state exemptions. You must choose one set or the other—you cannot mix and match. California does not allow use of federal bankruptcy exemptions.

California Exemption System 1 (CCP 704)

Most commonly used by homeowners with significant equity:

Homestead Exemption

$600,000 to $700,000 (varies by county)

California provides one of the nation's most generous homestead exemptions. The amount depends on the median home price in your county:

$700,000: In counties where median home price exceeds $350,000 (most Bay Area counties, parts of Southern California)
$600,000: In all other counties

This protection applies to your primary residence regardless of age or disability status.

Other System 1 Exemptions

Motor Vehicle: $3,525 of equity in one vehicle
Household Goods: Ordinary household furnishings, appliances, clothing reasonably necessary (no specific dollar limit, but must be "ordinary and necessary")
Jewelry: $8,725
Tools of Trade: $8,725 for tools, equipment, materials, and uniforms used in your trade or profession
Wildcard: $1,700 of any property (plus unused portion of homestead up to $31,950)
Health Aids: Unlimited exemption for health aids reasonably necessary
Benefits: Full exemption for unemployment, workers' comp, disability, and public assistance

California Exemption System 2 (CCP 703.140)

Often better for renters or those with limited home equity:

Key System 2 Exemptions

Homestead: $31,950 (much lower than System 1)
Motor Vehicle: $6,375 of equity
Household Goods: $775 per item, up to $14,875 total
Jewelry: $1,875
Tools of Trade: $8,725
Wildcard: $1,700 plus any unused homestead exemption (up to $31,950 total wildcard)

Which System Should I Choose?

Choose System 1 if:

You own a home with significant equity
You want maximum homestead protection
You don't have substantial personal property to protect

Choose System 2 if:

You rent or have minimal home equity
You want to maximize the wildcard exemption for personal property
You have significant cash, bank accounts, or other personal property

Retirement Accounts

Fully exempt under federal law (ERISA-qualified plans like 401(k), 403(b), pension plans are 100% protected). IRAs are protected up to $1,512,350 under federal law.

Filing Bankruptcy in California

Chapter 7 Bankruptcy in California

Chapter 7 is the most common bankruptcy filed in California. The process typically takes 3-4 months from filing to discharge.

Requirements:

Income below California median OR pass the means test
Complete credit counseling within 180 days before filing
Not have received a Chapter 7 discharge in the past 8 years
Not have received a Chapter 13 discharge in the past 6 years

Benefits for California Filers:

Keep your home if equity is under $600,000-$700,000
Discharge credit card debt, medical bills, personal loans
Stop wage garnishments and creditor harassment
Fast process (3-4 months)

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in California

Chapter 13 allows California residents to keep all property while repaying debts through a 3-5 year payment plan.

Best for California filers who:

Are behind on mortgage payments and want to avoid foreclosure
Have home equity exceeding the homestead exemption
Don't qualify for Chapter 7 due to income
Want to catch up on car payments
Have tax debt or child support arrears

Special California Advantage: If your home is underwater (you owe more than it's worth), Chapter 13 may allow you to "strip" second mortgages and home equity lines of credit, treating them as unsecured debt.

Learn more about Chapter 13 bankruptcy →

California Bankruptcy Courts

California has four federal bankruptcy court districts:

Northern District of California

Covers: Alameda, Contra Costa, Del Norte, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma counties

Court Locations: Oakland, San Francisco, San Jose, Santa Rosa

Website: canb.uscourts.gov

Eastern District of California

Covers: Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Glenn, Inyo, Kern (eastern portion), Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Stanislaus, Sutter, Tehama, Toulumne, Trinity, Yolo, Yuba counties

Court Locations: Fresno, Modesto, Sacramento

Website: caeb.uscourts.gov

Central District of California

Covers: Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, Ventura counties

Court Locations: Los Angeles (Downtown), Riverside, San Fernando Valley, Santa Ana, Santa Barbara, Woodland Hills

Website: cacb.uscourts.gov

Southern District of California

Covers: Imperial, San Diego counties

Court Locations: San Diego

Website: casb.uscourts.gov

How Much Does Bankruptcy Cost in California?

Court Filing Fees

Chapter 7: $338
Chapter 13: $313

Attorney Fees in California

California attorney fees vary by location and case complexity:

Chapter 7: $1,200 - $3,500 (higher in Bay Area and Southern California)
Chapter 13: $3,000 - $6,000 (can often be paid through the plan)

Credit Counseling and Financial Management

Pre-filing credit counseling: $10-$50
Post-filing financial management course: $10-$50

California Bankruptcy FAQs

Will I lose my house if I file bankruptcy in California?

Most California homeowners keep their homes in bankruptcy. With homestead protection of $600,000-$700,000, you can protect substantial equity. If you're current on your mortgage and your equity is within the exemption, you'll keep your home in Chapter 7. Chapter 13 allows you to catch up on missed payments over 3-5 years.

Can I keep my car?

Yes, if your vehicle equity is within the exemption limits ($3,525 in System 1 or $6,375 in System 2) and you're current on payments or willing to reaffirm the debt. You may also use wildcard exemption to protect additional equity.

How long does bankruptcy stay on my credit in California?

Chapter 7 remains on your credit report for 10 years; Chapter 13 for 7 years. However, many California filers can qualify for credit cards and car loans within 1-2 years after discharge.

Can I file bankruptcy in California if I just moved here?

Yes, if you've lived in California for the greater part of the 180 days before filing. However, you must use the exemptions from the state where you lived for the majority of the 730 days (2 years) before filing. If that's California, you use California exemptions.

What debts can't be discharged in California bankruptcy?

Non-dischargeable debts include:

Recent tax debts (less than 3 years old)
Student loans (except in rare cases of undue hardship)
Child support and alimony
Court fines and criminal restitution
Debts from fraud or willful injury
DUI-related judgments

Will bankruptcy affect my professional license in California?

No. California law prohibits discrimination based solely on bankruptcy. Your professional license (lawyer, doctor, nurse, contractor, real estate agent, etc.) cannot be denied or revoked because you filed bankruptcy.

Find a California Bankruptcy Attorney

Given California's complex exemption systems and high real estate values, most California residents benefit from hiring an experienced bankruptcy attorney. A qualified attorney can help you:

Choose the right exemption system (System 1 vs. System 2)
Maximize protection for your home and assets
Determine whether Chapter 7 or Chapter 13 is better for you
Navigate California's bankruptcy courts
Handle complex real estate or business issues
Protect your rights throughout the process

Connect with California Bankruptcy Attorneys

Most California bankruptcy attorneys offer free consultations.

Find a California Attorney