SB 308 Bankruptcy Exemptions Failed to Pass

California State Capitol in Sacramento

I have been watching Senate Bill 308 quite closely. The bill would have modernized California’s bankruptcy exemptions to allow debtors additional tools to protect their assets from the reach of creditors. Unfortunately, SB 308 failed to pass this year.

The first half of the 2015-16 California legislative session came to a conclusion on Friday, September 11. All bills headed to the Governor for his signature or veto must have been approved by both the Senate and Assembly by this deadline.

SB 308 started off as a strong effort to modernize California’s bankruptcy exemptions. The bill passed numerous tests, including several committee and floor votes. Along the way, the bill was amended several times to reduce and revise the proposed changes to California exception laws. While SB 308 was not as strong as it was when it began its life in the Senate, the bill still had plenty to offer California bankruptcy filers.

The bill ultimately stalled on the Assembly floor. The bill was generally opposed by Republican legislators and supported by Democrats. Republicans hold such a minority position in the Legislature that their support for the bill wasn’t ultimately needed. So it was a handful of democrats that kept the bill from passing. These democrat legislators didn’t outright vote “NO” on the bill. They instead “took a walk” and did not vote either way. In fact, over 20 legislatures failed to cast a vote on SB 308’s final floor vote in the Assembly.

The bill was strongly opposed by the California Bankers Association and the California Association of Collector. Both groups represent the interests of huge banks and debt collection firms. It is no surprise that they would oppose SB 308.

SB 308 isn’t totally dead. Senator Wieckowski can revive the bill in the second half of the legislative session in 2016. Or he could start fresh with a new proposal altogether. But for now, California exemption laws will remain the same.

If you have questions about Chapter 7 or Chapter 13 bankruptcy, please call my office at (916) 333-2222.