How to File Bankruptcy in Washington State

Updated April 17, 2020

When you don’t make enough to pay the bills, filing for bankruptcy in Washington can be a good solution. If you don’t know much about bankruptcy, learning about the differences between Chapter 7 and Chapter 13 bankruptcy is the best place to start. Next, you’ll want to know:

• whether your income qualifies for the bankruptcy chapter you’ve chosen, and
• if you can protect your property using Washington’s bankruptcy exemptions.

Not only will this article explains these key concepts, but it will help you find the official bankruptcy forms, approved educational courses, your local bankruptcy court, and more.

Qualifying for Bankruptcy in Washington—Means Testing

The means test measures your income and debt. The outcome will determine which chapter you’ll need to file to discharge (erase) debt.

• Chapter 7 bankruptcy. If your household income is lower than the median income of your state, you can receive a discharge in a Chapter 7 case. If it’s higher, you might still pass the means test after subtracting allowed expenses. If you qualify for Chapter 7 but want to take advantage of benefits only afforded in Chapter 13—such as catching up on a home loan—then you can pay into a three-year Chapter 13 plan, rather than a five-year plan.
• Chapter 13 bankruptcy. If your income exceeds the Chapter 7 limits, your bankruptcy options will be limited to paying into a five-year Chapter 13 repayment plan. But doing so isn’t automatic. You must have enough income to pay all required debts. Determining your Chapter 13 bankruptcy payment requires a calculation similar to that in Chapter 7. You’ll pay whichever is greater: your disposable income, the value of your nonexempt property, or the amount of your nondischargeable debt (such as support obligations and tax debt).

The necessary income charts and expense guidelines are on the U.S. Trustee’s website (select “Means Testing Information”).

Protecting Property With Washington’s Bankruptcy Exemptions

An important part of deciding the best chapter for you is determining whether you’ll lose any property. Don’t worry—you won’t lose everything. In fact, you might not lose anything at all.

Finding out which assets you can protect is as simple as looking at Washington’s bankruptcy exemption law. A list of federal bankruptcy exemptions exists, too, and Washington lets residents choose between the two lists. If you use Washington’s bankruptcy exemptions, you can also use the federal nonbankruptcy exemptions if they’re helpful.

Here's what will happen to nonexempt property (things you can’t protect with an exemption):

• In a Chapter 7 bankruptcy, the trustee appointed to manage your matter will sell any nonexempt property and distribute the proceeds to creditors according to the bankruptcy payment rules.
• By contrast, you can keep all of your property in a Chapter 13 bankruptcy. But, there’s a catch. You must pay the nonexempt property value to your creditors through the three- to five-year Chapter 13 repayment plan.
• Spouses who file together can double the exemption amount in each category (except for the homestead) as long as both spouses have an ownership interest in the

Washington’s Bankruptcy Exemption List

Here are some commonly used Washington bankruptcy exemptions. Unless indicated, all references are to the Revised Code of Washington (RCW) which you can find on the Washington State Legislature website.

Washington Homestead Exemption

The homestead exemption protects up to $125,000 of equity in a debtor’s home or principal residence, including a manufactured or mobile home. The exemption is reduced to $15,000 for other personal property used as a residence. (RCW §§ 6.13.010, 6.13.020, 6.13.030.)

Find out more in The Washington Homestead Exemption.

Washington Motor Vehicle Exemption

A debtor can exempt up to $3,250 in one motor vehicle. Spouses jointly filing can each exempt a vehicle. (RCW § 6.15.010(1)(d)(iii).)

Washington Wildcard Exemption

A filer can exempt up to $3,000 worth of any type of personal property other than wages with the following limitations: no more than $1,500 total in cash and $500 total for bank accounts; however a filer with consumer debt can exempt $2,000 in bank accounts, and a filer with student loan debt can protect $2,500 in bank accounts. (RCW § 6.15.010(1)(d)(ii).)

Other Bankruptcy Exemptions in Washington

You’ll find more Washington exemptions in Washington Bankruptcy Exemptions.

More Washington Bankruptcy Information

You’ll use this information when you’re ready to prepare your paperwork and file your case.

Washington Credit Counseling and Debtor Education Information

Individual filers must take two financial courses—one before filing and another before receiving a discharge (debt forgiveness). Approved providers are listed under “Credit Counseling & Debtor Education” on the U.S. Trustee’s website (be sure to scroll down to your district).

Bankruptcy Costs, Filing Fees, and Forms

Most people must pay something to file for bankruptcy, but it’s usually worth the cost. Here’s what you can expect.

• Official bankruptcy forms. Before the Washington bankruptcy court wipes out qualifying debt, you must disclose all aspects of your financial situation—income, expenses, property, debt, and property transactions—on official bankruptcy forms. These forms are free. After filling out the bankruptcy forms online on the U.S. Bankruptcy Court forms webpage, you’ll file your paperwork in your local bankruptcy court.
• Bankruptcy filing fees or fee waiver. You’ll pay a filing fee when you file your paperwork with the court unless you qualify for a fee waiver. Find out about both in Bankruptcy Filing Fees and Costs.
• Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on the area. Many people benefit from retaining counsel. Find out the benefits of being represented by an attorney.

Washington Bankruptcy Court Locations and Websites

Washington has two federal judicial districts with a bankruptcy court. Each court’s website has the court’s local rules and instructions for filing your paperwork. (Click “Bankruptcy Resources” and “Filing Without an Attorney.”)

The districts also have division locations, but not all are staffed. To determine where to file your case, visit the Federal Court Locator page, choose "Bankruptcy," and then enter your location information. You can also contact a court clerk at the numbers listed below.

This overview provides resources that will help a filer find information when preparing a bankruptcy filing; however, additional information is needed. Each filer must understand bankruptcy law and procedure and how it will affect the case. If you plan to file without an attorney, consider buying a do-it-yourself book like How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D.