Household Furnishings, Wearing Apparel, & Personal Effects Bankruptcy Exemption

In order to facilitate a fresh start for debtors in Santa Rosa chapter 7 bankruptcy, California Code of Civil Procedure Section 704.020 exempts ordinary and reasonably necessary household furnishings, appliances, provisions, wearing apparel, and other personal effects. Whether an item is “ordinary and reasonably” necessary is determined by evaluating (1) the extent to which items of the same type are ordinarily found in households & (2) whether the item has extraordinary value compared to other items of the same type found in other households. [Calif. CCP Section 704.020(b)].

Example: Ordinary & Reasonably Necessary

Items that are ordinary and reasonably necessary are of the same type ordinarily found in households and do not have extraordinary value compared to other items of the same type found in other households. For instance, a recliner valued at $200 may be ordinary and reasonably necessary; recliners are ordinarily found in households and the value is not extraordinary compared to other recliners. However, a specialty recliner valued at $4,000 is not ordinary and reasonably necessary; while recliners are found in other households, $4,000 recliners are not.

Limitation: Location & Use

In order to claim the 704.020 exemption, the items must be personally used by or procured for use by the debtor’s family at the debtor’s residence. [Calif. CCP 704.020(a)(1)] If the debtor and spouse are separated, the exemption can still be claimed if the items are personally used by or procured for use by the spouse’s family at the spouse’s residence. [Calif. CCP 704.020(a)(2)]

Proceeds Exemption To Replace Items of Extraordinary Value Where Replacement Is Reasonably Necessary

California Code of Civil Procedure Section 704.020(c) provides for a partial proceeds exemption for the sale of property of a type ordinarily found in other households but whose value is extraordinary. If the item of extraordinary value is sold and replacement of the item is reasonably necessary, the court can exempt the proceeds from the extraordinary item’s sale in an amount equivalent to the cost of replacing the item with an ordinary item of the same type. For example, say that a Santa Rosa guitarist has a $20,000 guitar. The guitar is of an extraordinary value compared to other guitars in other households. However, the guitarist needs a guitar to perform, and an ordinary guitar costs $1,000. Under these facts, the $20,000 guitar would be sold in California bankruptcy but the guitarist can exempt $1,000 of the proceeds because replacement of the guitar is reasonably necessary.