Exemptions: When you file for bankruptcy, you are allowed to protect a certain amount of “stuff” from liquidation under a Chapter 7 bankruptcy, or from being counted as an asset available to pay back creditors in a Chapter 13 bankruptcy. Washington allows you to choose from either the federal or state exemptions. Always speak with an attorney regarding the best choice for claiming exemptions in a bankruptcy. This is not an exhaustive list of exemptions, but a few examples of Washington State exemptions include:
Your house:
Under Washington law, homeowners may exempt up to $125,000 of their home or other property covered by the homestead exemption. If you are not living in the home, you must file a homestead declaration.
You can also protect up to $15,000 of unimproved property, but you must first file a homestead declaration.
Motor Vehicles:
A debtor may exempt up to $3,250 in one motor vehicle that is used for personal transportation or to maintain employment. A married couple may exempt two motor vehicles not to exceed $6,500. Wash. Rev. Code Ann. § 6.15.010(1)(c)(iii).
Personal Property:
You may exempt the following personal property:
- clothing, but no more than $3,500 for furs and jewelry
- books and electronic media to $3,500
- household goods, appliances, and furniture (not to exceed $6,500 per individual or $13,000 per married couple, with no single item to exceed $750)
- child support
- health aids
- health savings account and medical savings account deposits (6.15.020)
- keepsakes and family pictures
- tuition units purchased more than 2 years before filing
- spendthrift trusts (6.32.250; In re Findley, 286 b.r. 163 (2002))
- personal injury recovery and/or proceeds, not to exceed $20,000 per individual (doesn’t protect pain and suffering or past lost wages), and
- loss of future earning recoveries (to the extent reasonably necessary for support).
Wash. Rev. Code Ann. § 6.15.010.
Wages:
A debtor may exempt the following amount of his or her wages (except to enforce court awarded support orders):
- 75% of his or her disposable earnings; or
- 30 times the federal minimum hourly wage per week (whichever is greater).
Wash. Rev. Code Ann. § 6.27.150.
Pension and Retirement Accounts
A debtor may exempt pension benefits for federal employees, teachers, city employees, law enforcement officials, firefighters, state patrol officers, and volunteer firefighters. Wash. Rev. Code Ann. § § 6.15.020, 41.26.053, 41.28.200. 41.32.052, 41.24.240, 41.44.240, 43.43.310.
Tax-exempt retirement accounts (such as 401ks and IRAS) are exempt as per the federal rules.