Filing for Bankruptcy in Washington State

Washington State's Bankruptcy Exemption List

Here are some bankruptcy exemptions used regularly in Washington state.

Washington Homestead Exemption

The homestead exemption protects from $172,900 to $729,600 of equity in a debtor's home or principal residence, including a manufactured or mobile home. The amount will depend on the county in which your home resides. You'll find amounts listed by county and other requirements you'll need to meet in The Washington Homestead Exemption.

Also, the exemption is reduced to $15,000 for other personal property used as a residence, such as a mobile home. Spouses cannot double Washington's homestead exemption. (RCW §§ 6.13.010, 6.13.020, 6.13.030.)

Washington Motor Vehicle Exemption

A debtor can exempt up to $3,250 in one motor vehicle. Spouses jointly filing can each exempt a car. (RCW § 6.15.010(1)(d)(iii).) Find out how the motor vehicle exemption works in a Chapter 7 case.

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

This is just a small sampling of Washington exemptions. You'll find more in Washington Bankruptcy Exemptions. Unless indicated, all references are to the Revised Code of Washington (RCW). Also, keep in mind that amounts change. You'll find the exemption statutes on the Washington State Legislature website.

Preventing Bankruptcy Exemption Problems

Exempt your property carefully. The bankruptcy trustee—the court-appointed official assigned to manage your case—will review the exemptions. A trustee who disagrees with your exemptions will likely try to resolve the issue informally. If unsuccessful, the trustee will file an objection with the bankruptcy court, and the judge will decide whether you can keep the property.

Example. Mason owns a rare, classic car worth $15,000, but the state vehicle exemption doesn't cover it entirely. Believing that the car qualifies as art—at least in his mind—Mason exempts it using his state's unlimited artwork exemption. The trustee disagrees with Mason's characterization and files an objection with the court. The judge will likely decide the vehicle doesn't qualify as art.

Purposefully making inaccurate statements could be considered fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.

Qualifying for Bankruptcy in Washington

You'll meet the initial requirement if you've never filed for bankruptcy before. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Learn more about multiple bankruptcy filings.

You'll also need to meet specific chapter qualifications.

You'll qualify for Chapter 7 bankruptcy if your family's gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee's website (select "Means Testing Information").

Want an easy way to do this online? Use the Quick Median Income Test. If you find that you make too much, you still might qualify after taking the second part of the "means test." If, after subtracting expenses, you don't have enough remaining to pay into a Chapter 13 plan, you'll qualify for Chapter 7.

Qualifying for Chapter 13 can be expensive because the extra benefits come at a hefty price, and many people can't afford the monthly payment. To qualify, you'll pay the larger of:

• your priority nondischargeable debt
• the value of nonexempt property, or
• your disposable income.

Find out more about calculating a Chapter 13 bankruptcy payment.