Here’s how wildcard exemptions (and exemptions more generally) apply in the Northern District of California (i.e. for bankruptcy filers in California). Keep in mind: bankruptcy is governed by federal law but exemptions are controlled at the state level (unless the state “opts in” to federal exemptions).
1. California is an “opt-out” state
- California does not permit debtors to use the federal bankruptcy exemption scheme. Instead, you must use California’s state exemptions. Upsolve
- Within California, you must choose one of two exemption systems: the 703 system or the 704 system (named for California Code of Civil Procedure §§ 703 and 704). You cannot mix exemptions between the two.
So, in the Northern District of California, your wildcard exemption is limited to what the California 703 system allows (if you select that system) — you cannot use the federal wildcard exemption in a California bankruptcy.
2. The wildcard (catch-all) under California’s 703 system
If you choose the 703 exemptions, California does provide a wildcard (catch-all) exemption. Under Cal. CCP § 703.140(b)(5):
- The base wildcard is $1,550 (equity) in any property. YMAWS
- In addition, you may add any unused portion of your 703 “homestead” exemption (i.e. the unused equity protection under § 703.140(b)(1)).
When added together, this can significantly increase the effective amount you can apply flexibly to any property.
For example:
- Suppose your 703 homestead exemption (under § 703.140(b)(1)) is $29,275 (this is one of the published amounts)
- If you don’t use any of that homestead exemption, then your wildcard can include the full $29,275 plus the $1,550 base wildcard → total $30,825 that can be applied to any property under 703.140(b)(5).
Thus, in many California bankruptcy cases under the 703 system, debtors use that wildcard flexibility to protect cash, extra vehicle equity, or other assets not fully covered by the standard exemptions.
3. If you select the 704 exemptions
If instead you choose the 704 system (which is often more favorable for filers with significant home equity), note:
- The 704 system does not include a wildcard exemption. There is no catch-all “apply to any property” bucket. The Bankruptcy Site
- The 704 exemptions tend to favor protection of home equity (i.e. a larger homestead exemption) at the cost of more limited flexibility for other personal assets.
So, under 704, you lose the advantage of a wildcard — any property not covered by one of the specific 704 exemptions is at risk of being non-exempt.
4. How this all plays out in the Northern District (and strategy considerations)
In practice, for someone filing in the Northern District (which is still in California), the exemption choice is strategic:
- If you don’t own a home or have little equity, the 703 system often gives you more flexibility thanks to the wildcard, allowing you to protect cash, vehicles, or other assets.
- If you do own a home with significant equity, the 704 system might allow you to better protect the home equity (through a higher homestead exemption), but you sacrifice wildcard flexibility for other assets.
- You must commit to one system at the time of filing, and you can’t mix and match.
Also, there are federal timing and domicile rules (from the Bankruptcy Code) that may affect which state’s exemptions you must use:
- You generally must have been a resident of California for at least 730 days (2 years) before filing to use California’s exemptions.
- If you moved recently, there is a “look-back” rule: you might have to use the exemptions of a prior state of residence.
Summary (for Northern District of California)
- You cannot use the federal wildcard exemption in a California bankruptcy — you must use California’s exemptions (unless very unusual circumstances).
- The wildcard in California exists only under the 703 exemption system (not under 704).
- Under 703, you get a base wildcard plus any unused 703 homestead exemption, which can result in a significant flexible shield.
- Under 704, there is no wildcard — you rely on fixed exemptions for each asset class.
If you have questions about wildcard bankruptcy exemptions in the Northern District of California contact David A. Arietta, Esq. at (925) 472-8000.