Sen. Wieckowski's bankruptcy modernization bill advances

Low-income families would benefit from the badly-needed updates to state's bankruptcy laws

July 1, 2015

Sacramento – The Assembly Judiciary Committee yesterday passed Senate Bill 308 by Senator Bob Wieckowski (D-Fremont) to assist low-income families by modernizing the list of exemptions people can use for personal bankruptcies. 

“SB 308 prevents overly stripping the modest assets of California’s working poor in bankruptcy cases,” said Wieckowski, a member of the Senate's Judiciary Committee.  “It allows debtors to have a much better shot at becoming self-sufficient again, avoiding more bad debts and avoiding public assistance.”

The bill is part of the Senator’s Economic Equity and Financial Stability Initiative, a package of three bills, SB 308, SB 501 and SB 641, focusing on reducing income inequality by reforming California’s laws covering bankruptcies, default judgments and wage garnishments.   All three bills passed the state Senate last month.

“Most people who file for bankruptcy never had much money to begin with and between 2005-2010 73 percent earned $40,000 or less, with 40 percent earning below $20,000,” Wieckowski said.  “They don’t earn enough to dig themselves out of a hole.”

SB 308 raises the caps on a number of bankruptcy exemptions to increase the chances of the working poor to regain their financial footing and make meaningful contributions to the state’s economy.

For families who face home foreclosures, garnished wages and collection lawsuits, bankruptcy is the best hope for protecting their basic household assets.  However, the exemptions have languished over the years and do not reflect current economic realities.

Senator Wieckowski represents the 10th Senate District of California, which includes southern Alameda County and northeast Santa Clara County.