Important new exemption for debtor’s “deposit account.”

These new exemptions became effective January 1, 2020.

CCP 704.220. (a) Money in the judgment debtor’s deposit account in an amount equal to or less than the minimum basic standard of adequate care for a family of four for Region 1, established by Section 11452 of the Welfare and Institutions Code and as annually adjusted by the State Department of Social Services pursuant to Section 11453 of the Welfare and Institutions Code, is exempt without making a claim.

Well that’s a hand full.  Translation, money in the debtor’s bank account is automatically exempt up to a “basic standard amount.”  I should say automatically as long as the debtor does not use the 703 exemptions.  It appears that right now that the basic amount is $1,724.  It also appears that that amount is fixed whether the debtor is single or has a family of four.  I am looking into that now.

But the big one is, is 704.225 which says:

§ 704.225.  Money in a judgment debtor’s deposit account that is not otherwise exempt under this chapter is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor.

I haven’t found anything helpful in figuring out what is “necessary for the support,” in the new legislation at least  If the debtor has $25,000 in a savings account, it is exempt if that amount is necessary for the debtor’s support.  I guess if the debtor has a job and can support himself from his current income, no amount would be necessary.

Ca Commercial Code § 9102 provides:

(29) “Deposit account” means a demand, time, savings, passbook, or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument.

Remember, the 704 exemptions don’t have a “wildcard.”  But this gives the debtor who owns a home and needs the homestead exemption a chance to save some money.

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