1. United States
2. Calif.
3. Letter

I urge you to modernize California’s bankruptcy exemptions under Sections 703 and 704 of the California Code of Civil Procedure (C.C.P.). These exemptions no longer reflect today’s economic realities, leaving many Californians unable to recover from financial hardship. For example, average monthly rent often exceeds $3,000, requiring a $9,000 income to meet affordability guidelines, while most workers earn far less. Renters face exploitative practices like extra fees for pets, parking, or storage. Yet the Chapter 7 income cutoff of $70,000 excludes many middle-income earners from bankruptcy protection. This threshold should increase to $120,000 to align with modern costs. Current exemptions fail to meet today’s needs: Section 703’s $33,650 wildcard exemption is insufficient for those with heavy debt burdens. Section 704’s homestead exemption of $626,400 excludes renters, who face similar challenges. Exemptions for vehicles ($3,325) and personal property ($8,725) are outdated. I propose the following reforms: Annual Updates: Automatically adjust exemptions annually based on inflation and economic data like housing costs and unemployment. Raise Income Thresholds: Increase the Chapter 7 income cutoff to $120,000 to reflect current living costs. Expand Exemptions: Adjust the wildcard and property exemptions to protect individuals with significant unsecured debt, such as student loans and medical bills. Include Renters: Develop exemptions addressing high rental costs and landlord practices. Modernizing these protections is essential to help Californians recover from financial distress in a rapidly changing economy. Please prioritize legislation to update our bankruptcy laws. Thank you for your attention.