About
NACBA’s State Advocacy program supports our members in state capitals on passing legislation that represents consumer debtor interests. NACBA partners with our members and assists in identifying key contacts, forming working groups, coalition building, outreach, and educating key state leaders on important issues.
During various legislative sessions, state leaders introduce legislation dealing with bankruptcy reform and consumer issues. From 2020 to today, NACBA has supported our members in their work on changing state exemption laws that protect property, income, and other assets from seizure by creditors.
Exemption laws are critical in protecting consumers and
their families from poverty and allow for them to build towards
financial recovery.
Without improved exemption laws, collection actions will drain
away essential resources that families need
.
Reform of exemption laws protect families from further hardship and act as an economic recovery
tool.
If you are looking for advocacy help in your state, please contact Krista D’Amelio, NACBA Director of Government Affairs & Communications: krista.damelio@nacba.com
Made with Visme
STATE LEGISLATION SUCCESS 2020-2024
ARIZONA
- Proposition 209 was approved by voters in November 2022 and went into effect on December 5, 2022.
- The homestead exemption increased from $150,000 to $400,000. (ARS §33-1101)
- The exemption on household furniture, furnishings, goods and appliances increased from $6,000 to $15,000. (ARS § 33-1123)
- The
exemption on the debtor’s equity in one motor vehicle increased from
$6,000 to $15,000, or if the debtor or debtor's dependent has a physical
disability, from $12,000 to $25,000. (ARS § 33-1125)
- Beginning in 2024, those exemption rates will be adjusted to account for changes in the cost of living.
CALIFORNIA
S.B.1099: Signed into law on September 28, 2022. The bill went into effect January 1, 2023. Highlights include:
- "Ride through" option restored for vehicles (no more repos for failure to reaffirm).
- Homes protected from trustees selling them due to post-petition appreciation where had been fully protected by the homestead exemption on the petition date. Such appreciation will also be exempt.
- Spouses living separate or apart from a non-filing spouse will no longer require a waiver from the non-filing spouse to utilize our alternate set of exemptions (which are usually more favorable for non-homeowners).
- Increases the motor vehicle exemption to $7,500 for both sets of exemptions.
- Creates new exemption fully exempting vehicles converted for use by a disabled debtor, spouse or dependent.
- Creates new exemption for up to an aggregate amount up to $7,500 for accrued or unused vacation pay, sick leave, family leave or wages.
- Creates new exemption for payments from settlement agreements arising from debtor's employment (e.g. workplace harassment).
- Creates new exemption for alimony, maintenance and support which was not previously included in the set of exemptions which includes the homestead exemption.
A.B. 1885: Signed into law on September 18, 2020. A.B. 1885 increases the homestead exemption in the event of a bankruptcy to $300,000 or the countywide median sale price of a single-family home in the calendar year prior to the year when the judgement debtor claims the exemption. It caps the amount at $600,000 and, beginning in January 2022, adjusts it annually for inflation based on the change in the California Consumer Price Index.
COLORADO
S.B. 22-086: Increases the homestead exemption from $75,000 to $250,000 if the homestead is
occupied as a home by an owner of the home or an owner's family; and from $105,000 to $350,000 if the homestead is occupied as a home by an owner who is elderly or disabled, an owner's spouse who is elderly or disabled, or an owner's dependent
who is elderly or disabled.
- Homestead exemption covers non-traditional housing; Reinstates bank account exemption up to $2,500; increases vehicle exemption to $12,000/$25,000 [60+ or disabled]; Increases Household Goods exemption to $6,000/person; Increases disability benefit
exemption to $5,000/mo; Increases farm equipment/livestock exemption to $100,000; Adds exemption for future economic stimulus payments; Adds firearm/hunting equipment exemption [up to $1,000]; Adds exemption for health savings accounts [HSAs];
Adds exemption for funds reserved for taxes & insurance on some reverse mortgages; and keeps exemptions on unemployment & child support even if funds commingled.
- Signed into law on April 7, 2022. Bill took effect upon Governor's signature.
CONNECTICUT
H.B. 6466:
Raises the homestead exemption to $250,000, the motor vehicle exemption
to $7,000, and creates an exemption for the cash surrender value of
life insurance policies.
DELAWARE
H.B. 318:
Raises the homestead exemption from $125,000 to $200,000 and the motor vehicle exemption
to $25,000 from $15,000. This Act also exempts worker’s compensation awards under the laws of
other states from attachment in bankruptcy or other proceedings in the
same manner that a worker’s compensation award made under Delaware law
is exempt.
The Act takes effect on January 1, 2025.
FLORIDA
S.B. 158: Increases the motor vehicle exemption from $1,000 to $5,000, effectively
enabling more individuals to retain their cars during bankruptcy
proceedings.
- Signed into law on April 26, 2024. Bill takes effect on July 1, 2024.
MINNESOTA
SF 4097- Minnesota Debt Fairness Act: along
with key medical debt reform and judgment collection reforms, provisions
of the Act include bankruptcy exemption changes that take affect on August 1, 2024.
Bankruptcy Reforms
- Doubling vehicle protection from $5,000 to $10,000, with additional protection for persons with disabilities and work vehicles.
- $2,000 protection for sacred and religious possessions.
- $3,000 protection for household tools, such as snowblowers and lawnmowers.
- Low income-based tax credits.
- Protection for money received in personal injury lawsuits.
- Protection for personal electronics and jewelry.
- $1,500 wildcard exemption for any property.
NEW MEXICO
S.B. 216: Significantly increases the homestead exemption for New Mexicans from $60,000.00 per person ($120,000.00 for a married couple)
up to
$150,000.00 per person ($300,000.00 for a married couple) effective July 1, 2023.
-
Household goods and furnishings exempt up to $75,000.00 per person to ensure that families can retain essential household items.
- Motor
vehicle exemptions increased from $4,000.00 per person per vehicle to
$10,000.00 per person per vehicle, enabling New Mexicans to keep their
means of transportation and mobility during challenging financial times.
- Jewelry exemption increased to $5,000.00 per person to protect personal items with sentimental or monetary value.
- Tools of the trade increased to $15,000.00 per person
- A wildcard exemption increased from $500 to $15,000.00 per person
- An exemption in lieu of a homestead increased from $5,000.00 per person up to $15,000.00 per person
OREGON
S.B. 1595: Family Financial Protection Act (FFPA)
extends comprehensive protections for families navigating debt recovery
and shields consumers from unjust collection practices. Key provisions
of the bill include:
- Expansion
of Home Protection: Individuals and couples now enjoy increased home
protection up to $150,000 and $300,000, respectively, a significant
enhancement from the previous $40,000 threshold for individuals.
- Gradual
Wage Exemption Increase: By 2027, the wage exemption from court seizure
or garnishment will rise annually to keep pace with inflation.
- Bank
Account Protection: The first $2,500 in an individual's bank account is
now shielded from garnishment or seizure, preventing debt collectors
from depleting entire accounts.
- Protection
Against Unowed/Incorrect Debt: Collectors are prohibited from
attempting to collect debts known to be non-existent or inaccurately
calculated.
- Motor Vehicle Protection: Debtors can now exempt up to $10,000 for any motor vehicle, a significant increase from $3,000.
- Fair
Legal Fee Protection: Consumers are relieved from covering creditor or
debt collectors' attorney fees, making it financially feasible to
contest incorrect debts and fostering a level playing field for
consumers.
- Signed into law on April 4, 2024. Goes into effect on January 1, 2025.
VIRGINIA
HB 1339: Signed on April 8, 2024. Becomes effective July 1, 2024.
- Homestead exemption doubled from $25,000 to $50,000, building upon the 2020 enactment.
- Car exemption increased from $6,000 to $10,000.
- Provision for indexing of most exemptions for future adjustments.
- Resolution of ambiguity: Clarification to prevent the use of the $25,000 homestead exemption for non-residential personal property alongside the $5,000 wildcard. This clarification was intended to align with the original legislative intent.
H.B. 790: Makes various changes to homestead exemptions, including providing that the official schedule of property claimed exempt filed with the United States Bankruptcy Court in a bankruptcy proceeding constitutes a sufficient writing to exempt such real and personal property from creditor process. The bill also provides that a householder may hold exempt from creditor process real or personal property that the householder or his dependent uses as a principal residence not exceeding $25,000 in value.
WASHINGTON
S.B. 5408: Signed into law on May 12, 2021, it raises the Washington Homestead Exemption to the greater
of $125,000 or the county median sale price of a single family home.
Fair Shot Act (SB 5173/HB 1400): Signed into law on May 9, 2023. Became effective on July 23, 2023. The Fair Shot Act will help ensure that:
- People keep enough money in their bank account to cover rent and necessities
- Working families keep their cars
- Couples (married or not) have individual security of their belongings.
- Small business owners keep the tools they need to run their business
- Injured persons protect their compensation for pain and suffering
2024 State Work
Check out the states NACBA is currently assisting to change important bankruptcy exemption laws. See your state and want to participate? Don't see your state and want to get started advocating for change? Contact NACBA's Director of Government Affairs & Communications
Print Page