2026 California homestead exemption
California’s 2026 Homestead Exemption: Keep Your Home in Bankruptcy
How Lever Law helps you keep your home through Chapter 7 or Chapter 13. A bankruptcy-only practice serving Long Beach, Los Angeles, Orange County, and the South Bay, focused on protecting the equity you have worked for.
The basics
What the homestead exemption is
In a California bankruptcy, the homestead exemption is the slice of equity in your principal residence that the bankruptcy court protects from creditors and from the Chapter 7 trustee. If your equity sits within the exemption amount that applies to your county, that equity stays with you, not with creditors.
The exemption lives in California Code of Civil Procedure section 704.730. Under that statute the amount is not a single flat number. It is a county-specific figure tied to your county’s prior-year median single-family home sale price, with a statewide floor and a statewide cap that move every year with the California Consumer Price Index. The 3 percent CPI adjustment for 2026 shifted both ends of that range upward.
For most Californians, the practical answer to “can I keep my house if I file bankruptcy” is yes, and the homestead exemption is a big part of why. The harder question is how the exemption interacts with your specific equity, your specific chapter, and your specific plan. That is the conversation we want to have with you.
How much is protected in 2026
A county-specific range, with a maximum of approximately $744,000
For bankruptcies filed in 2026, the California homestead exemption is a range that runs from approximately $371,547 (the statewide floor) up to approximately $744,000 (the statewide maximum). Inside that band, the exemption that applies in your case equals your county’s prior-year median single-family home sale price, adjusted annually for California CPI and rounded to the nearest $25. Higher-priced counties land near or at the maximum; lower-priced counties land at or above the floor.
2026 statewide bands
- Statewide maximum: approximately $744,000 (the cap, no California county can exempt more in 2026)
- Statewide floor: approximately $371,547 (no California county can exempt less in 2026)
- Your county’s amount: equal to your county’s prior-year median single-family home sale price, within the floor-to-cap band, CPI-adjusted and rounded to the nearest $25
- Source: California Code of Civil Procedure section 704.730
The approximately $744,000 figure is the maximum, not a flat entitlement. Whether your case lands at, above, or below that number depends on your county and on the equity math in your file. We confirm the exact applicable figure when we look at your situation.
California homestead exemptions vary by county median home price and adjust periodically for inflation. Many Southern California counties, including Los Angeles and Orange County, qualify for the maximum exemption amount.
Chapter 7 and Chapter 13
How the exemption works
Chapter 7 Exemption
Chapter 7 is the chapter that asks the equity question hardest. The Chapter 7 trustee has the power to sell non-exempt assets to pay creditors. The homestead exemption is what keeps your home off that list when your equity is fully protected.
The math is straightforward in shape, even if it takes work to get the numbers right. Start with the fair market value of your home. Subtract the mortgage balance, the costs the trustee would incur on a sale, and the homestead exemption amount that applies in your county. If the result is zero or negative, the trustee has no economic reason to sell, and your home is safe in Chapter 7. If the result is positive, that surplus equity may be at risk, and a different plan, often Chapter 13, becomes the better tool.
Because the 2026 exemption can reach approximately $744,000, most California homeowners who file Chapter 7 keep their home. That is not a guarantee for any individual case. It is the practical pattern we see, and it is one of the reasons we always run the numbers before recommending a chapter.
Chapter 13 Exemption
Chapter 13 is the chapter people use to save a home. There is no trustee sale of your residence in a Chapter 13. Instead, you propose a three to five year repayment plan that the court approves, and you keep the house as long as you make the plan payments. The homestead exemption still does important work inside that plan.
First, the exemption sets the floor for what unsecured creditors are entitled to receive through the plan. Under the “best interests of creditors” test, your plan must pay unsecured creditors at least as much as they would have received in a hypothetical Chapter 7 liquidation. The bigger the exemption that applies to your home, the smaller the surplus equity, and the lower the unsecured-creditor floor your plan has to clear.
Second, in cases where a junior mortgage or HELOC is wholly unsecured because your home is worth less than the senior loan balance, Chapter 13 lien stripping can remove that junior lien entirely. That tool is independent of the homestead exemption, but it lives next door to it, and many of the homeowners who come to Lever Law for “can I keep my house” benefit from both at once.
Third, if you fell behind on your mortgage, Chapter 13 lets you cure that arrearage over the life of the plan while you stay current going forward. The homestead exemption is what keeps the lender from forcing a sale of equity-rich property to short-circuit that cure.
Who qualifies
Who can claim the California homestead exemption
The CCP 704.730 homestead is automatic in California. You do not have to file a separate declaration to use it in bankruptcy. You do, however, have to meet the usual residency and ownership conditions: the property has to be your principal residence at the relevant time, you have to own it (or hold the equivalent equity interest), and you have to have been domiciled in California long enough to use the California exemption set when you file. The federal Bankruptcy Code adds a 1,215-day rule that can cap how much homestead equity a recently arrived filer can protect; we will check that against your timeline.
A pre-recorded “declared homestead” under California law is a separate, voluntary instrument that can offer non-bankruptcy benefits. It is not required to claim the CCP 704.730 amount in your bankruptcy case. If you have one, bring a copy. If you do not, that is fine.
Talk to a bankruptcy attorney
Free consultation to evaluate your specific situation
Tell us a little about your situation and we will walk through the homestead math with you. All submissions are confidential and the first conversation is always free.
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Figures last reviewed: June 15, 2026