In bankruptcy, a homestead exemption protects equity in your home. Washington state has a fairly generous homestead exemption. Here you’ll find specific information about the homestead exemption in Washington.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
Under the Washington exemption system, homeowners may exempt up to $125,000 of their home or other property covered by the homestead exemption.
If you owe money to any state for failing to pay income tax for pension or retirement benefits you receive while living in Washington, the homestead exemption is unlimited as to that debt.
Some states allow married couples filing a joint bankruptcy to double the homestead exemption amount, but in Washington, you cannot double. Even so, there are reasons a married couple would choose to file a joint bankruptcy.
In Washington, the homestead exemption applies to real or personal property used as your principal residence, including your home, condominium, mobile home, or manufactured home.
You may also use the homestead exemption to protect $15,000 of unimproved property upon which you intend to construct a house or place a mobile home.
In Washington, you can use either the state exemption system or the federal bankruptcy exemption system (but you can’t pick and choose different exemptions from each system – you have to use all state exemptions or all federal exemptions.)
The federal bankruptcy homestead exemption amount changes every three years. To find the current amount, see our article The Federal Bankruptcy Exemptions. The exemption may be used for homes, condos, co-ops, mobile homes, and burial plots. Married couples may double this exemption. You can find the federal bankruptcy homestead exemption at 11 U.S.C. §522(d)(1) and (5).
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Washington, if you live in your home at the time you file bankruptcy, you don’t have to file a homestead declaration in order to claim the homestead exemption. However, if you use the homestead exemption to protect unimproved land or property that you don’t yet live in, you must file a homestead declaration (a form filed with the county recorder’s office to put on record your right to a homestead exemption). If you intend to use the homestead exemption for unimproved property or a home you do not yet live in, you must also file a declaration stating you are abandoning the property in which you currently reside and are claiming the unimproved or new property as your homestead. Contact your county recorder for information on how to file a homestead declaration and declaration of abandonment.
Washington’s homestead exemption is found in the Washington Revised Code at Wash. Rev. Code Ann. Section 6.13.030. To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.
You can find the section of the Washington Revised Code that contains the homestead exemption at www.apps.leg.wa.gov/RCW.