When filing bankruptcy in California, you have a choice of claiming either the "Homestead Exemptions" or the "Wild-Card Exemptions", under California Code of Civil Procedure 704 and 703, respectively. A debtor wishing to protect their real estate in a bankruptcy proceeding will want to claim the Homestead Exemptions which currently allow for exemptions of $75,000 for unmarried debtors with no dependents, $100,000 for a family unit (married, or single with dependents), and $175,000 for debtor's who are disabled or 65 and older.
CCP section 704.730 provides for a $100,000 homestead exemption for a “family unit” if the debtor or the debtor's spouse who resides in the homestead is a member of a “family unit” and:
- At least one member of the “family unit” owns no interest in the property; OR
- One family unit member's sole interest in the property is a community property interest with the debtor.
However, CCP § 704.710 defines a “family unit” to include, among other situations, as “the debtor and his or her spouse, if they reside together in the homestead.” As the statute specifically uses the language “reside together in the homestead” it would be inferred by statutory interpretation that the inclusion of one thing implies the exclusion of another and that a married couple where only one spouse lives in the homestead would not be considered a “family unit” for purposes of determining a right to claim an increased homestead exemption.
CCP § 704.720(d) states: “If a judgment debtor is not currently residing in the homestead, but his or her separated or former spouse continues to reside in or exercise control over possession of the homestead, that judgment debtor continues to be entitled to an exemption under this article until entry of judgment or other legally enforceable agreement dividing the community property between the judgment debtor and the separated or former spouse, or until a later time period as specified by court order.”