Assembly to consider bill to help seniors, families in danger of losing their homes

SB 308 is supported by AARP, NAACP, California Labor Federation, Attorney General Harris, Treasurer Chiang and broad coalition

June 8, 2016

Sacramento – The California State Assembly this Thursday will consider a bill on the floor to modernize the state’s outdated bankruptcy laws to provide a fresh start for families in need and to better protect consumers – especially seniors, the blind and the disabled – from having their home forcibly sold to pay off an unsecured debt.  The bill, SB 308, is strongly supported by senior groups, labor, legal rights advocates, public interest organizations, and state elected officials, including Attorney General Kamala Harris, State Treasurer John Chiang and Board of Equalization member Fiona Ma.

“When you look at the list of people and organizations supporting SB 308 it is a `Who’s Who’ of Californians who have a long history of standing alongside working people, struggling families and our seniors,” said Senator Bob Wieckowski, the bill’s author and a member of the Senate’s Judiciary Committee.  “Supporters of this bill care about reducing income inequality, standing up to special interests to fight for working families and the elderly, and for providing a path out of debt for individuals who are trying to stay in their homes while battling rising medical bills.  When it comes to protecting people’s homes from creditors, other states have done much more than California, but SB 308 gives us a chance to close the gap and do what’s right.”

The bill will update the state’s homestead exemption law to better reflect current home values and housing market realities.  It will allow consumers to retain more of their assets, and, in many cases, to keep their family home.  The median price for a single-family California home is $509,100.  SB 308 makes modest adjustments to the homestead exemption from $75,000 to $100,000 for single residents, from $100,000 to $150,000 for married couples, and from $175,000 to $300,000 for seniors, the blind and the disabled, the most vulnerable.  

The bill also eliminates an onerous requirement that any leftover money from the forced sale of a home must be reinvested into another home within six months.  It restores the flexibility that existed in code prior to a 2012 court case.

If a home is forcibly sold, any taxes, liens and the mortgage would be paid before the consumer receives the exemption.

Florida, Oklahoma, and Texas have unlimited homestead exemptions, and Nevada and Ohio are just a few of the 14 states that have higher limits than California despite having much lower home prices.

“SB 308 will help prevent the forced sale of many Californians’ homes from an unsecured creditor,” wrote AARP in support of the bill.  “Not requiring the sale of a house to pay off a debt promotes the correct public policy of encouraging Californians to invest in their homes, with the knowledge that that investment is safe.”

Senator Wieckowski’s district includes southern Alameda County and northeast Santa Clara County.