California’s Homestead Exemption and Your Home Equity in Bankruptcy

Whether you keep your home in a California bankruptcy often comes down to one thing: the homestead exemption, which protects a chunk of your home equity from creditors. California's is generous compared with many states — but it has structure and limits. Here is how it works, with a bankruptcy attorney for your county's exact figure.

California homestead exemption bankruptcy — protect home equity under CCP 704.730, amounts vary by county

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How the Exemption Is Calculated

Per California Code of Civil Procedure § 704.730, the homestead exemption is the greater of your county's median single-family-home sale price for the prior year or a statutory floor, up to a cap — and both the floor and the cap adjust every year for inflation. For 2026, that works out to roughly the mid-$300,000s at the low end up to about $743,681 at the high end, depending on your county's median home price.

Why the Amount Varies

Because the exemption is tied to county median home prices, it is different in a high-cost coastal county than in parts of the Central Valley — and it changes annually. That is why no article can give you your exact number: it depends on your county and the year you claim it. A bankruptcy attorney (or the published Judicial Council amounts) will have the current figure for your county. Treat any number you read online, including ours, as approximate.

How It Decides Keep vs. Sell

The math is straightforward in concept: take your home's value, subtract what you owe (the mortgage and any liens), and that is your equity. If your equity is within the homestead exemption, it is generally protected — in Chapter 7 you can usually keep the home. If your equity is larger than the exemption, the trustee may sell the home, pay you the exempt amount, and use the excess for creditors. Knowing roughly where you fall helps you and your attorney plan.

A note on California's two exemption systems

California has two exemption sets — often called the 703s and the 704s. The homestead exemption is in the 704s; the 703s offer a flexible ‘wildcard’ that can be better if you have little home equity. You must choose one set (California does not allow the federal exemptions), and you generally must have lived in California for a set period to use them. Which set is best is a question for a bankruptcy attorney.

If Selling Is the Right Move

If your equity is over the exemption, or you would simply rather sell and move on, an as-is cash sale is fast and certain — during a case with court approval, or freely after discharge. We buy as-is, with no repairs, and close on a timeline that fits your situation. Confirm your county's exemption and your options with a bankruptcy attorney; this is general information, not legal or financial advice.