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Your friend would be able to claim the exemption for his homestead, which ranges from $75,000 to $175,000 depending on circumstances and facts. Here's a good link on the different exemption amounts: http://www.nolo.com/legal-encyclopedia/the-california-homestead-exemption.html
As for stopping the sale of his house by filing, a chapter 7 will not do that. Filing a chapter 7 will delay the process, but it cannot stop it. Once a bankruptcy is filed, the automatic stay (11 USC 362) goes into effect and stops creditors from pursuing creditors, like your friend. HOWEVER, creditors can file a motion with the court to lift the automatic stay as to the property it is interested in and proceed with the collection. Thus, the tax collector could file a motion to lift stay AFTER he files bankruptcy and could proceed to sell his property for the taxes due. He should be entitled to the money remaining from the sale, but it won't stop the sale.
If he were to file chapter 13, then he could keep his house and propose to repay the tax debt over time, which the court would likely approve. That may be the better option as he can prevent the sale and try to sell the house on his own time and then pay the taxes when he does sell the place.
He can certainly discuss these options with his attorney, but filing bankruptcy can help him, but a 13 would likely help most.
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