Newsom signs Wieckowski bankruptcy bill

September 28, 2022

SACRAMENTO ­— Governor Gavin Newsom today signed a bill by Senator Bob Wieckowski (D-Fremont) to help families in bankruptcy hold onto their homes and to keep possession of their modestly-valued cars, among a series of other changes designed to fulfill the promise of a fresh start that bankruptcy is supposed to provide.

“A family’s financial status can spiral down quickly due to the death of a loved one, astronomical medical bills or a sudden job loss. These improvements to our bankruptcy laws will help prevent Californians from falling deeper into poverty,” said Wieckowski, a member of the Senate Judiciary Committee. “I applaud Governor Newsom for standing with families in dire straits and I appreciate his approval of these sensible steps to help those who are struggling. By signing this bill, he has ensured that consumers in bankruptcy cannot have their car repossessed if they have never missed a payment and any increase in home value during the bankruptcy case will not result in people, including seniors and retirees, losing their homes and joining the already high numbers of unhoused in California. These and other parts of SB 1099 will help put more people on the road to recovery.”

Bankruptcy is designed to pay out creditors for some of the debt owed and to provide debtors with relief from crippling debt so they may get a fresh start. Wieckowski has led the way in updating the state’s bankruptcy code during his years in the Legislature and SB 1099 adds even more improvements.

SB 1099 increases the value of a paid-off car people can keep from being sold in bankruptcy to $7,500. It also enables consumers to keep their vehicles that have been converted for use by people with disabilities, such as with motorized steps or a wheelchair lift. In cases where no home is involved, it allows a married person who files individually for bankruptcy to not have to seek permission from their estranged or abusive spouse. The bill also ensures that money awarded as part of an employment law claim, such as for racial discrimination, retaliation or sexual harassment, goes to the debtor.

“SB 1099 is packed with protections long needed by California bankruptcy debtors,” said Ike Shulman, a San Jose bankruptcy attorney and founding president of the National Association of Consumer Bankruptcy Attorneys (NACBA). “No longer will families risk losing their homes solely due to changes in a home’s value after filing their case.  The new law also more accurately accounts for the costs of a functioning car, as well as better protections for the disabled, for support recipients, for abandoned spouses, and for victims of workplace harassment. It’s all in there and more. With this legislation, Senator Wieckowski has once again stepped forward to give Californians who are struggling financially a real boost in getting a fresh start.”

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

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