The National Consumer Law Center recently published a report on state exemption laws titled Still No Fresh Start in 2019: How States Still Let Debt Collectors Push Families into Poverty. After surveying all 50 states, they concluded that none of these jurisdictions have adequate laws in place to protect debtors.
Areas of state exemption law concerns include:
- Preserving the debtor’s ability to work
- Protecting the family’s housing, necessary household goods and means of transportation
- Protecting a living wage for working debtors
- Protecting a reasonable amount of money in a bank account
- Protecting retirees from destitution
- Automatic updating for inflation
- Loopholes that enable some lenders to evade exemption laws
In the opinion of the NCLC, all states lack the basic standards to allow debtors to continue to work productively to support themselves and their families. California ranked in the middle with a rating of “C” indicating “Protections have many gaps and weaknesses”. The most glaring protection deficiency in California relates to preserving the family’s home: California received an “F” because the amount of protected equity is merely 20% of the median state home value. The family car rating is a “D” because of the low earmarked exemption of, at most, $5,350. Clearly California has a lot of room for improvement and reform in its state exemption laws.
Until state laws are reformed to address the various concerns of the NCLC, a good attorney can help you maximize the benefit of the existing laws. Call attorney Chris Bush, at (619) 678-1134, for more information. He is an experienced bankruptcy attorney and passionate consumer debt advocate. He’ll help you obtain the best solution to your debt burden and get back you on a track to financial freedom.