"Equity" means the fair market value of the interest of the judgment debtor in property, or in the case of community property the fair market value of the interest of the judgment debtor and the spouse of the judgment debtor in the property, over and above all liens and encumbrances on the interest superior to the judgment creditor's lien.
§ 680.190.Equity
Title 9. Enforcement of Judgments · Division 1 · Chapter 1. Short Title and Definitions · Enacted 1982 · no amendments on record · Last verified July 28, 2026
In one sentenceSection 680.190 defines equity as the fair market value of the judgment debtor's interest in property, or of both spouses' interest in community property, above every lien or encumbrance senior to the judgment creditor's own lien, the figure that determines whether property is worth pursuing at all.
Full Text of § 680.190
Plain-English Summary
Owning property and having collectible equity in it are two different things. A house worth $600,000 with an $580,000 mortgage carries very little equity, and a judgment creditor with a junior lien position may find there is nothing left to reach after the mortgage and any senior liens are paid. This section defines equity as exactly that residual value: fair market value minus everything senior to the creditor's own claim.
For community property, the definition folds in both spouses' interest together, reflecting that community property is generally owned by the marital community as a whole rather than by each spouse separately -- so the equity calculation looks at the whole community interest before deciding what the creditor can reach.
Equity calculations like this one drive some of the most consequential decisions in the enforcement process: whether forcing a sale of a homestead is worthwhile, whether an asset is worth the cost of levying on it at all, and how exemption claims interact with what remains available to satisfy the judgment.
Frequently Asked Questions
How is "equity" calculated under the Enforcement of Judgments Law?
Fair market value of the judgment debtor's interest in the property, minus all liens and encumbrances on that interest that are senior to the judgment creditor's own lien.
Does the equity calculation change for community property?
Yes. For community property, the calculation looks at the fair market value of the interest belonging to both the judgment debtor and the debtor's spouse together, not just the debtor's individual share.
Why does the amount of equity in an asset matter to a judgment creditor?
Because if senior liens consume most or all of an asset's value, there may be little or nothing left for the judgment creditor to recover, making the cost of levying on it not worthwhile.
Amendment History
Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: equity definition california judgment enforcementcommunity property equity judgment lien california