You keep your house in a California Chapter 7 if two things are true: your equity fits inside the homestead exemption, which is $743,459 in Los Angeles County for 2026, and you're current on the mortgage or can get current quickly. If you're behind and want to stay, Chapter 13 is the tool built for that.
The homestead number for Los Angeles County
California's homestead exemption under CCP § 704.730 has a floor of $371,547 and a cap of $743,459 for 2026, and the figure for your county is tied to the prior year's countywide median sale price. Los Angeles County's median sits well above the cap, so the exemption here is the full $743,459. Orange County is at the cap too. Riverside and San Bernardino counties land somewhere between the floor and the cap, and no state agency publishes an official chart, which means the number has to be worked out from sales data and defended if a trustee questions it.
The exemption protects equity, not value. A house in Mar Vista worth $1.4 million with a $900,000 first mortgage has $500,000 of equity. That's under $743,459. The trustee has nothing to sell.
The exemption is per homestead, not per person. A married couple filing jointly gets $743,459, not double.
Where the equity math goes wrong
Trustees don't use Zillow. They order a broker's opinion or an appraisal, and in a rising market they look hard at any house listed at a round number that happens to sit just under the line. The cost of sale matters too: a trustee who sells pays a commission and closing costs, typically 6 to 8 percent, and that cost is subtracted before your exemption. A house with $780,000 of equity on paper may have only $700,000 in the trustee's math, which is why a case that looks over the line sometimes isn't.
Two things move the number the other way. A second mortgage or HELOC reduces equity, and so does a recorded tax lien. A judgment lien from an old collection case does not reduce it for exemption purposes, but the lien can often be avoided in the case with a separate motion.
Current on the mortgage: the other half
The exemption keeps the trustee away. It does nothing about the lender. If you're three payments behind on a mortgage, the automatic stay pauses the foreclosure the day you file, but the lender will file a motion for relief from stay within a few weeks, the judge in the Roybal building will grant it, and the sale will be rescheduled. Chapter 7 has no mechanism for catching up on arrears over time.
So the honest version of "can I keep my house in Chapter 7" is: yes, if the mortgage isn't the problem. When the mortgage is the problem, the answer is Chapter 13, which lets you spread the missed payments over up to five years while making the regular payment going forward. We'll tell you which one fits on the first call, and a comparison of the two is on our page on Chapter 7 versus Chapter 13.
System 1 is not optional here
California makes you choose between two exemption systems. The large homestead lives in System 1 (CCP § 704). System 2 (CCP § 703.140) has a much smaller homestead and a wildcard. A homeowner with meaningful equity is effectively locked into System 1, which has knock-on effects: the vehicle exemption is roughly $7,500 instead of a stackable wildcard, and cash in the bank on filing day has almost no protection beyond 75% of the last 30 days of wages.
That's the tradeoff. Protecting $500,000 of house equity is worth giving up protection on a $6,000 savings balance, but the savings balance needs to be dealt with before filing, lawfully, and we plan for that.
The house you're surrendering
Some people file Chapter 7 because they've decided to let the house go. That's a legitimate use of the chapter. The discharge wipes out your personal liability on the first mortgage, the second, and the HELOC, so there's no deficiency to chase you afterward. The lender forecloses on its own timeline, which in Los Angeles County can run many months after the discharge, and you may live there rent-free during that time. Property taxes and HOA dues that come due while you still hold title remain yours.
In the petition, you mark the house "surrender" on the statement of intention. Nothing in that word obligates you to move out on any particular day.
Reaffirming a mortgage: almost never
Mortgage lenders sometimes send a reaffirmation agreement after a Chapter 7 is filed. Signing one puts you back on the hook for the entire balance if you later default. In the Central District, judges rarely approve mortgage reaffirmations and there's rarely a reason to want one. You keep the house by paying the mortgage. The lender keeps the lien. The only common casualty of not reaffirming is the monthly statement, which some servicers stop sending; a phone call usually restarts it. More on this on the page about reaffirmation agreements, and the wider picture of what a Chapter 7 case does with secured property.
The number I get asked about most is the one I can't hand out from a chart, because nobody publishes one. For Los Angeles County the answer is easy: we're at the cap. For a client in Hemet or Victorville I have to pull the prior year's median sale price and be ready to defend it. A trustee once challenged a figure a client's previous attorney had guessed at, and the difference was $80,000 of equity. Guessing at the homestead figure is not a place to save time.
Questions people ask about this
Do I have to be current on my mortgage to file Chapter 7?
No, but if you want to keep the house you need to be current or able to catch up in a hurry. Chapter 7 can't spread arrears over time. If you're behind and want to stay, Chapter 13 is the chapter that does that.
Is the homestead exemption automatic or do I have to record something?
In bankruptcy you claim it on Schedule C. You don't need a recorded homestead declaration to use it. You do need to actually live in the property as your principal residence on the filing date.
What if my equity is a little over the exemption?
The trustee has to account for the cost of selling, so a small overage often isn't worth pursuing. Where it is, the trustee will usually negotiate a buyback rather than sell your house. Chapter 13 is also an option and lets you keep the house while paying the overage through the plan.
Does my spouse's name on the deed change anything?
In California, a home bought during marriage is usually community property, which comes into the estate even if only one spouse files. The homestead exemption still applies to the whole homestead, once. A pre-marriage house held as separate property is treated differently.
Can I keep a rental property in Chapter 7?
The homestead exemption only covers the home you live in. A rental with equity is exposed unless it fits under a wildcard, which is small under System 2 and unavailable under System 1. Rentals with equity often point toward Chapter 13.
Talk it through with the attorney
Tell Naomi your rough home value and mortgage balances on a free video consultation and she'll run the homestead math with you on the call.