SB 308, A bill in the California Legislature, would allow debtors who need serious financial help to file bankruptcy without losing their homestead exemptions if they don’t reinvest the money in a new home within six months.
As it stands now, California law requires that a homestead exemption be used to buy another home within six months of receiving the exemption. If it is not used for another home within six months, it must be given back and the debtor receives no homestead exemption. The problem is that in today’s high-priced market, most people who lose their homes cannot afford to buy another home in California, even with a homestead exemption.
A new bill in the California Legislature, SB 308, would eliminate the six-month reinvestment requirement for people who get their homestead exemption in bankruptcy. If this legislation were to become law, debtors in bankruptcy would be allowed to keep their homestead exemptions and use the money for whatever they wish. This homestead exemption money would provide people who lose their homes in bankruptcy with funds to resettle into a new home, even if they cannot afford to buy it. Without this major change, people often lose their homestead exemptions in California and are left with nothing after losing their homes.
Another improvement is that SB 308 would increase the homestead exemption slightly. The increase is smaller than what was first proposed and what is needed, but any increase is better than none.
Contact your Assembly representative and tell them to vote for SB 308. The banks are strongly opposed to SB 308 and it failed last year for just that reason. In order for SB 308 to become law, your Assembly representatives need to hear from you. And contact the Law Office of Jeff D. Hoffman if you have serious financial problems, we can help!