AB 198

Bill Subjects

Abstract

(1) Existing law provides prohibits the seller or holder of a conditional sale contract for a motor vehicle from accelerating the maturity of any part or all of the amount due under the contract or repossessing the vehicle in the absence of default in the performance of any of the buyer's obligations under the contract. This bill would provide that neither the act of filing a bankruptcy petition by the buyer or other individual liable on the contract nor the status of either of those persons as a debtor in bankruptcy constitutes a default in the performance of any of the buyer's obligations under the contract and neither may be used as a basis for accelerating the maturity of any part or all of the amount due under the contract or for repossessing the motor vehicle. (2) Existing law identifies various types of property of a judgment debtor that are exempt from the enforcement of a money judgment. Existing law provides that property described in statute as exempt may be claimed within the time and in the manner prescribed in the applicable enforcement procedure, and property described in statute as exempt without making a claim is not subject to any procedure for enforcement of a money judgment. These general exemptions are available to a debtor in a federal bankruptcy case, whether a money judgment is being enforced by execution sale or other procedure, unless the debtor elects certain alternative exemptions. Existing law authorizes a husband and wife who jointly file a bankruptcy petition to jointly elect to utilize the general exemptions or the alternative exemptions, but not both. The general exemptions are applicable if a bankruptcy petition is filed individually, and not jointly, for a husband or a wife, except that the husband and wife may jointly waive in writing their right to claim, during the period the case commenced by filing the petition is pending, the general exemptions and instead elect to utilize the alternative exemptions. This bill would provide that a joint waiver is not required from a debtor who is separated from his or her spouse as of the date the bankruptcy petition is filed. This bill would require, for purposes of determining the exemptions that are available to the debtor in a federal bankruptcy case, that the value of the debtor's interest in property be determined as of the date the bankruptcy petition is filed. The bill would provide an exemption for the debtor's entire interest in the property, including any appreciation in value of that interest following the date the bankruptcy petition is filed, if the value of the debtor's interest in the property on the date the petition is filed is less than or equal to the amount the debtor is permitted to exempt. Existing law includes an alternative exemption for the debtor's right to receive a payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless all of several specified conditions apply, including that the plan or contract does not qualify under specified provisions of the federal Internal Revenue Code of 1986. This bill would provide that a plan or contract covered by this alternative exemption would be exempt even if it did not qualify under the specified provisions of the federal Internal Revenue Code of 1986 so long as the sole basis for the failure to qualify is a technical defect. Existing law includes alternative exemptions for the debtor's right to receive, or property that is traceable to, a payment on account of the wrongful death of an individual of whom the debtor was a dependent and a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of that individual's death. This bill would make these exemptions applicable, as well, to payments regarding an individual of whom the debtor was a spouse. Existing law includes an alternative exemption for the debtor's right to receive, or property that is traceable to, a payment up to $24,060 on account of personal bodily injury of the debtor or an individual of whom the debtor is a dependent. This bill would make this exemption applicable, as well, to a payment on account of personal bodily injury of the spouse of the debtor. Existing law includes an alternative exemption for the debtor's right to receive, or property that is traceable to, a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent to the extent reasonably necessary for the support of the debtor and a dependent of the debtor. This bill would make this exemption applicable, as well, to a payment regarding an individual of whom the debtor is or was a spouse, and would provide that the exemption applies to the extent reasonably necessary for the support of the debtor and a spouse or dependent of the debtor. Existing law provides that the benefits from a matured life insurance policy, including an endowment or annuity policy, are exempt to the extent reasonably necessary for the support of the debtor and the spouse and dependents of the debtor. This bill would expand this exemption to include an aggregate amount of benefits up to $500,000 plus any amount that is reasonably necessary for the support of the debtor and his or her spouse and dependents. The bill also would add an alternative exemption for the debtor's interest in these expanded benefits. Existing law provides that vacation credits, as defined, are exempt from enforcement of a money judgment without making a claim. This bill would delete the definition of "vacation credits" set forth in these provisions and expand this general exemption to also include accrued or unused vacation pay. The bill also would add an alternative exemption for the debtor's right to receive these expanded assets. Existing law provides that up to $2,300 of any combination of aggregate equity in motor vehicles, the proceeds of an execution sale of a motor vehicle, and the proceeds of insurance or other indemnification for the loss, damage, or destruction of a motor vehicle, is exempt. Existing law includes an alternative exemption for up to $4,800 of the debtor's interest in one or more motor vehicles. This bill would increase the amount of the general exemption for motor vehicle equity to $4,800, matching the maximum amount of the alternative exemption for motor vehicles, and make conforming changes. This bill would provide that the aggregate interest of a debtor who is engaged in business, not to exceed five thousand dollars ($5,000) , in cash or deposit accounts, accounts receivable, and inventory of the business is exempt. Existing law includes an alternative exemption for the debtor's right to receive alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. This bill would provide that these assets are exempt, thereby adding a general exemption matching the existing alternative exemption. Existing law provides that all amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are exempt. Existing law defines "private retirement plan" to include self-employed retirement plans and individual retirement annuities or accounts provided for in the federal Internal Revenue Code of 1986, including individual retirement accounts qualified under specified provisions of that code. This bill would expand this exemption to also include individual retirement accounts that do not qualify under those specified provisions on the basis of a technical defect alone. Existing law provides that various causes of action and awards of damages or settlements arising out of those actions are exempt to various extents, as specified. This bill would provide that a cause of action arising out of or regarding the violation of any law relating to the judgment debtor's employment is exempt without making a claim, except as provided in specified statutory provisions, and an award of damages or a settlement arising out of or regarding the violation of any law relating to the judgment debtor's employment is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor. The bill also would add identical alternative exemptions in this regard. This bill would increase the homestead exemptions described above to $200,000, $300,000, and $400,000, respectively. The bill would revise the age-defined eligibility criteria for the $400,000 exemption to include any judgment debtor or spouse of a judgment debtor residing in the homestead who is 55 years of age or older at the time of the sale, regardless of his or her income. Existing law provides that the proceeds of sale or of insurance or other indemnification for damage or destruction of a homestead, the proceeds received as compensation for a homestead acquired for public use, or the proceeds from a voluntary sale of a declared homestead, are exempt in the amount of the homestead exemption provided in a specified statute for a period of six months after the time the proceeds are actually received by the judgment debtor, except as provided. This bill would delete the six-month limitation on these exemptions, thereby making these proceeds exempt indefinitely, and make conforming changes. Existing law provides that a specified portion of equity in a homestead, as defined, is exempt from execution to satisfy a judgment debt. Existing law provides a base exemption of $75,000, an exemption of $100,000 if the judgment debtor or his or her spouse who resides in the homestead is, at the time of the sale, a member of a family unit, and one member of the family unit is without an interest, or with only a limited interest, as specified, in the homestead, and an exemption of $175,000 if the judgment debtor or the spouse of the judgment debtor who resides in the homestead is, at the time of the sale, 65 years of age or older, disabled, or 55 years of age or older with a limited income, as specified.