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June 11, 2013 at 10:00 AM
A bill in the California Assembly could help Golden State disability insurance beneficiaries who run into financial problems protect more home equity.
The bill also could help residents who run into financial problems keep matured life insurance policies and annuity contracts.
State Assembly Member Bob Wieckowski, D-Modesto, Calif., introduced the bill — Assembly Bill 198 – on behalf of the National Association of Consumer Bankruptcy Attorneys (NACBA).
The bill would increase the dollar amounts in some of the California debtor exemption rules that let residents going through bankruptcy court proceedings and other legal proceedings protect some of their assets.
One provision, the homestead exemption, would increase the amount of home equity that debtors with financial problems could protect.
For homeowners who live in a home and could not work because of a physical or mental disability, the home equity protection exemption would increase to $400,000, from $175,000.
The same limit increase would apply to a homeowner ages 55 years or older who actually lived in the home in question.
Another provision would let any debtor keep up to $500,000 in benefits from a matured life insurance policy, along with “any amount reasonably necessary for the support of the judgment debtor and his or her spouse and dependents,” according to Chuck Nicol, a legislative analyst for the Assembly Appropriations Committee.
