Improving Chance of Recovery After Bankruptcy

Bill Oxford

California lawmakers are considering whether to increase exemptions for bankruptcy debtors to allow individuals and families a better chance of keeping their homes and to give small-business owners a stronger chance of recovery.

The legislation (SB 308) aims to ensure fairness in bankruptcy by enabling debtors to retain more assets than currently allowed. Under the current low exemptions, older people are at particular risk of having to give up their homes and apply for public assistance, according to state Sen. Bob Wieckowski (D-Fremont), who sponsored the bill. The legislation also creates a modest exemption for the many small-business owners who advocates say are often left with insufficient assets to get back on their feet.

A vote is expected this summer. AARP California urges members to contact their state assembly members and advocate for passage. To contact your legislator, go to assembly.ca.gov/assemblymembers.