Consumer Bankruptcy Journal Fall 2015 - Page 10

SENATE BILL 308 By By M. Erik Clark Borowitz & Clark, LLP T he recent news that many of our nation’s unemployed have stopped looking for work is a troubling sign amid the glowing economic data that continue to show a declining unemployment rate. Our economy narrowly escaped a fiscal meltdown late last decade, yet the recovery disproves the often repeated saying that a rising tide lifts all boats. For families on the margins, already pushed toward bankruptcy by home foreclosures, garnished wages and collection lawsuits, the rising tide is far from uplifting. who are burned by the sizzle in the form of sky high rents and over-thetop home prices. The median cost of a home in the Golden State is $448,000 and rents in San Francisco are $3,500 for one bedroom. market conditions. It would increase the state’s homestead exemption to $300,000 for disabled persons and seniors, $150,000 for a family and $100,000 for single residents. Today, the growing gap between home prices and the homestead exemption Another serious problem – the requirement that bankruptcy debtors who have their homes sold by a bankruptcy trustee lose their entire homestead exemption after six months from the sale date if they don’t reinvest means the exemption is failing to provide protection from creditors for a typical home. Sen. Wieckowski introduced SB 308, supported by NACBA, to reflect today’s housing those proceeds in a new home – would be eliminated in the bill. That requirement has been in effect only since April 2012 because of the Ninth Circuit Court of Appeals case In re In 1975, the homestead exemption exceeded the median home price. These families see bankruptcy as a last resort and their one remaining hope to protect their dwindling assets. Fortunately, the National Association of Consumer Bankruptcy Attorneys is teaming up with California State Senator Bob Wieckowski (D-Fremont) to reform the state’s outdated bankruptcy laws and provide these desperate families a real path to financial recovery. California’s state homestead laws are out of step with the cost of housing. In the booming San Francisco Bay Area, with its sizzling tech industry, the economy is roaring and une mployment rates are at or near three percent in some counties. Although that is great news for the region, there are many, especially seniors and the disabled, 10 CONSUMER BANKRUPTCY JOURNAL Winter 2015 National Association of Consumer Bankruptcy Attorneys