Legislation Supported by AARP, Attorney General Kamala Harris, and State Treasurer John Chiang is “Right for California Consumers in Tough Times”
SACRAMENTO, CA – September 8, 2015 – With nearly half of California adults – some 14 million consumers – having no savings to weather a financial crisis, S.B. 308 is an urgently needed bill that will help struggling California families and seniors save their homes, stay employed, and get back on their financial feet, according to the National Association of Consumer Bankruptcy Attorneys (NACBA).
Now facing opposition from the California bankers who can now further enrich themselves by stripping consumers in financial crisis of all of their assets, the fair and common-sense bill introduced by Sen. Bob Wieckowski, D-Fremont, protects California consumers facing financial hardship by reducing the likelihood that they’ll lose their homes in bankruptcy. The common-sense, pro-consumer measure is supported by AARP, legal services organizations, labor groups, Attorney General Kamala Harris and State Treasurer John Chiang.
Responding to a smear campaign launched by California bankers in which it is falsely claimed that S.B. 308 will protect the wealthy, NACBA’s Legislative Chair Ike Shulman said: “These are the same people who brought our economy to the brink of collapse a few years ago, from which thousands of families are still trying to recover. While they got bailed out and protected their wealth, they are now trying to use their influence to kill a bill to help the families who were the victims of the bankers’ greed. Bankers got us into this financial mess, but rather than help California residents who were harmed in the economic downturn, they want to make things tougher still.”
In outlining the need for passage of S.B. 308, NACBA highlighted the following points:
- It recognizes that you may need help to save your home. Nationwide, more than half of Americans are living paycheck to paycheck, just one emergency away from being wiped out financially. Here in California, 48 percent of us – nearly 14 million adults! — have no rainy day savings to deal with unanticipated financial expenses. A full third of us can only afford credit card minimums and 14 percent have unpaid medical expenses. That means millions of California residents could one day need the help S.B. 308 will provide.
- It protects the homes of Californians, particularly seniors and the disabled. The current homestead exemption has fallen dramatically behind the increased cost of housing in California. It has been 40 years since the California homestead exemption actually covered the cost of an average home in this state. Today, it only protects about a quarter of a typical house. S.B. 308 modestly increases homestead exemptions, with the most meaningful increase reserved for seniors and disabled persons. It would bump up California’s state homestead exemption to $300,000 for disabled persons and seniors, $150,000 for a family unit and $100,000 for a single individual.
- It makes sure that people in dire financial straits are not stripped of their home equity. S.B. 308 fixes a serious problem for Californians who have their homes sold in bankruptcy. Until three years ago, California families whose homes were sold during bankruptcy were always able to protect their homestead exemption funds and use them for their future needs. But due to a 2012 court ruling, families stand to lose their entire homestead exemption after six months from the sale date if they are unable to reinvest those proceeds in a new home. Since most debtors who have recently filed for bankruptcy are unable to secure financing to purchase a replacement home within that time period, they end up losing everything. S.B. 308 restores to homeowners the protection the law provided before 2012, and is essential for anyone who owns a home and may need to file for bankruptcy relief.
- It understands that some people need a fresh start. Most people in this state who file for bankruptcy don’t want to do it … and are of relatively modest means. According to June 2014 data, approximately 115,000 bankruptcy cases (Ch. 7 & Ch. 13) were filed in California in 2013, which represents about 170,000 Californians. Why make it even more difficult for these people to get their often shattered financial lives back together again? The truth is that there is everything to be gained by returning them to good financial health as productive citizens and taxpayers.
The National Association of Consumer Bankruptcy Attorneys is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA now has more than 3,000 members located in all 50 states and Puerto Rico. http://www.nacba.org.