Determining Your Bankruptcy Exemptions In Washington

As the twentieth-ranked state in the nation in unemployment, thousands of citizens in the Northwest considered bankruptcy options in 2009, as well as Washington bankruptcy exemptions. Over 30,000 Washington citizens determined that bankruptcy was the solution for their financial problems, in many cases because the property exemption laws in the state provided the kind of protection they needed.

Bankruptcy Solutions

When someone determines that bankruptcy is the right choice for them to find debt relief, they must decide which type of bankruptcy is the most appropriate, and for which they qualify.

Chapter 7 bankruptcy is limited to those who have an income low enough to meet the “means” test and little equity in their property that could be liquidated to pay creditors. Once they file, most, if not all, of their debts may be discharged in chapter 7 bankruptcy.

Chapter 13 bankruptcy is more appropriate for those with significant property they want to protect from liquidation and sufficient income to meet a modified debt repayment schedule.

Filing Chapter 7 Bankruptcy

Those debtors who determine that chapter 7 bankruptcy is the best solution for their debt problems should then pursue the process, often with the help of a bankruptcy attorney to make sure they take advantage of all the benefits available to them. Chapter 7 bankruptcy includes:

A court-ordered stay, or hold, on all creditor collection efforts

Filing and filling out the proper forms, including listing those types of property the filer can claim as exemptions

Address secured debts, by redeeming the property (or paying its current replacement value), reaffirming the debt under a new repayment agreement, or surrendering the property to the lien holder (although if it is of little worth, the creditor may abandon the property to the debtor)

Determination by a court-appointed bankruptcy trustee which non-exempt property, if any, must be liquidated to pay creditors

A meeting with all creditors who have claims against the debtor’s assets to answer any questions they may have about the resolution of the bankruptcy

Discharge of all qualified debts

Washington Property Exemptions

Washington law allows a debtor to claim either state or federal exemptions, but not some of both, when filing for chapter 7 bankruptcy. Federal exemptions include:

Homestead, or residential property – up to $21,625

Household furniture, equipment, and personal items – up to $550 per item to a total of $11,525

Jewelry – up to $1,450

Motor vehicle – up to $3,450

Tools of the trade – up to $2,175

On the other hand, Washington state exemptions include:

Real property or mobile home – up to $125,000

Motor vehicle – up to $2,500 for one or up to $5,000 if two are shared by a married couple

Clothing, furs, jewelry, and ornaments – up to $1,000

Household goods – up to $2,700 or $5,400 for married couple

Food and other necessities – as required

Health aids

Wild card – up to $2,000

Burial plot

Pensions – ERISA-qualified benefits, among others

Tools of the trade – up to $5,000

Some forms of insurance

Getting Legal Help with Bankruptcy Property Exemptions in Washington

It is important for anyone filing chapter 7 bankruptcy to consider their property exemptions carefully to determine whether Washington state or federal exemptions will be more advantageous for the filer. However, a bankruptcy attorney can analyze their client’s financial situation and help them choose those exemptions that provide the greatest debt relief as well as the greatest opportunity to begin rebuilding their life and their financial future.

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