What California Statutes Exempt Social Security Benefits in Chapter 7?

Question from JT, What California Statutes Exempt Social Security Benefits in Chapter 7?

Answer from AI:

Federal statutes that protect Social Security benefits

• 42 U.S.C. § 407 – This provision of the Social Security Act bars most creditors from attaching or garnishing Social Security benefits. The protection is broad and does not set a dollar cap; it applies to the entire benefit amount a debtor receives.
• 11 U.S.C. § 522(d)(10) – The Bankruptcy Code’s “exemptions” section specifically lists “any public benefits, including Social Security benefits,” as exempt property in a Chapter 7 case. Like § 407, the statute does not impose a monetary limit, meaning the full amount of the benefit is protected.

California statutes that exempt Social Security benefits

• California Code of Civil Procedure § 704.010 – This state‑wide exemption states that “all money received as Social Security benefits” is exempt from the bankruptcy estate. The language is absolute; there is no dollar restriction.
• California Code of Civil Procedure § 704.070 (the “wild‑card” exemption) – While not required for Social Security benefits (they are already exempt under § 704.010), the wildcard can be used for any cash or personal property up to the statutory amount (currently $1,550). It is sometimes mentioned in practice guides to show that a debtor could apply the wildcard to other cash assets if needed.

How the amounts work in practice

• No monetary cap – Both the federal exemption (42 U.S.C. § 407 and 11 U.S.C. § 522(d)(10)) and the California exemption (§ 704.010) protect all Social Security benefits, regardless of the monthly or annual total. Whether a debtor receives $800 per month or $2,500 per month, the entire benefit is shielded from the bankruptcy trustee and from creditor claims.
• Interaction with other exemptions – In California a debtor may elect either the “704” set of exemptions (which includes the Social Security exemption) or the “703” set (which contains a different list of property categories). Because the Social Security exemption appears in the 704 list, a debtor who chooses the 703 list must still rely on the federal exemption under 11 U.S.C. § 522(d)(10) to protect those benefits. In either case, the protection is unlimited.

Practical points to keep in mind

• Automatic protection – Social Security benefits are automatically exempt; the debtor does not need to file a separate claim with the trustee.
• Bankruptcy filing forms – When completing the Schedule of Exemptions (Form B106), the debtor should list “Social Security benefits – fully exempt under 42 U.S.C. § 407 and Cal. Civ. Proc. § 704.010.”
• Potential exceptions – The only limited circumstance where Social Security benefits could be touched is for certain federal tax debts, child support, or alimony obligations, which are not covered by the exemption statutes.

When to seek professional help

While the statutes provide clear, unlimited protection for Social Security benefits in a California Chapter 7 case, each bankruptcy involves many moving parts—such as the choice between the 704 and 703 exemption sets, the treatment of other assets, and the presence of non‑exempt debts. For personalized guidance on how these exemptions fit into a specific case, it is advisable to consult a licensed bankruptcy attorney.

Primary sources:

• Federal protection: 42 U.S.C. § 407 – Social Security Act
• Bankruptcy exemption: 11 U.S.C. § 522(d)(10) – Public benefits exemption
• California exemption: Cal. Civ. Proc. § 704.010 – Social Security benefits exemption