Consumer Bankruptcy Journal Fall 2015 - Page 11

SENATE BILL 308 Jacobson, which reversed longstanding practice. Imagine being a debtor with a bankruptcy filing on your credit report and trying to get a loan to purchase a home in California’s sky-high-price market. Freddie Mac and Fannie Mae deny mortgage credit to bankruptcy debtors for years after the date of discharge. Failing to reinvest means you lose your entire homestead proceeds to the trustee. This hits seniors especially hard because much of their savings are tied up in their home. They view their home equity as a nest egg they can draw on in their golden years to afford the basic necessities of life. Beyond the homeowner’s exemption, the bill makes some other important changes to assist financially distressed individuals. It creates a new state exemption to help small business owners claim up to $5,000 for cash or deposit accounts, accounts receivable and business inventory for those debtors using the exemptions under CCP § 704, et. seq. of the code. This will allow small business owners to resume business operations, including the underemployed and self-employed trying to bring in more money with home-based businesses. The bill boosts the amount of personal property exemptions available to debtors, including a bump in the allowed exemption for motor vehicles from a paltry $2,900 to $6,000. Since most debtors are employed at the time of filing, a dependable vehicle is key to them keeping their job. The California Legislature wound down its session in mid-September with a flurry of bills, including climate change, the right-to-die and medical marijuana regulations. After clearing the state Senate, SB 308 bankruptcy reforms came up short of the necessary votes in the state Assembly. As supporters lobbied the Legislature it became clear more education is needed on this often complex subject. Still, there’s plenty of good news for those who want to bring these laws up to date. For starters, the fight continues. The bill can be approved in the second year of session, which begins in January. Also, there are major supporters of the legislation in statewide and legislative leadership positions. California Attorney General Kamala Harris, State Treasurer John Chiang, the President pro Tem of the state Senate, and the current Speaker and Speaker-elect of the state Assembly all endorsed SB 308. Rediscover the lost art of human interaction. Solo and small firm clients don’t want to talk to a machine. Which is why firms like yours rely on Ruby, the highly trained team of offsite receptionists who handle all your calls with the perfect mix of friendliness and professionalism. With Ruby, you’ll stand out from the competition by providing an exceptional customer experience delivered by a real, caring person. 866-611-RUBY (7829) or visit SB 308’s changes to California’s outdated bankruptcy exemptions will make sure more boats stay afloat when the next storm hits. M. Erik Clark Borowitz & Clark, LLP Los Angeles, CA M. Erik Clark is a partner at Borowitz & Clark, LLP in Los Angeles and is an Adjunct Professor at Loyola Law School. National Association of Consumer Bankruptcy Attorneys Winter 2015 CONSUMER BANKRUPTCY JOURNAL 11