California Senate approves Wieckowski's bankruptcy bill to help debtors keep their home, car

August 24, 2022

SACRAMENTO ­— The California Senate approved SB 1099, authored by Senator Bob Wieckowski (D-Fremont), today to prevent consumers in bankruptcy from losing their car to repossession when they have never missed a payment and to eliminate the incentive for trustees to stall a case until the family home appreciates enough to forcibly sell it. The bill now heads to Governor Newsom for his consideration.

“This bill makes important improvements to our bankruptcy laws to help prevent families from falling deeper into debt,” said Wieckowski, a member of the Senate Judiciary Committee. “It allows people to keep a modest used vehicle, to not lose a house that has appreciated in value during the bankruptcy and prohibits a bankruptcy from triggering an auto loan default. By allowing people to maintain possession of their home and vehicle under these circumstances, it improves their chances of regaining their financial footing and paying off their debts.”

If the consumer’s equity in a residence does not exceed the allowed homestead exemption when the bankruptcy petition is filed, SB 1099 would make any appreciation in the property’s value exempt during the case. SB 1099 also increases the amount of equity in a motor vehicle that is exempt to $7,500 in “703” exemptions.

“Consumer protection needs have reached an all-time high,” said Jenny L. Doling of J. Doling Law. “The fact that SB 1099 passed the California Senate with overwhelming support speaks volumes.  This bill is about making a difference in the lives of real people.  To help ensure those most in need are protected, SB 1099 provides exemptions to help protect their vehicle, the equity in the family home, medically equipped vehicles for our disabled community members, sick leave pay, child support, and personal injury and death settlements. Senator Wieckowski and NACBA (National Association of Consumer Bankruptcy Attorneys) have been champions of consumer rights and protections. It’s been an honor to work with both on this important piece of legislation.  We look forward to seeing Governor Newsom sign this bill into law.”

In cases where no home is involved, SB 1099 also allows a married person who files individually for bankruptcy to not have to seek permission from their estranged or abusive spouse.

The bill is sponsored by the NACBA. It is supported by Debt Relief Legal Clinic of San Diego County, California Low Income Consumer Coalition, National Consumer Law Center, Consumer Federation of California, Borowitz & Clark, and Gold & Hammes.

Senator Wieckowski represents the 10th Senate District, which includes parts of Alameda and Santa Clara counties.