Washington Bankruptcy Exemptions and Law

Washington state residents who need debt relief and a fresh start have the option of filing for bankruptcy. Washington law allows you to eliminate some debts and protect assets while paying off creditors. Depending on the type of bankruptcy you choose, you may be able to keep most of your property while paying your debts, leaving you with a clean slate after the remainder are discharged.

Washington Bankruptcy Law

Under federal law, the U.S. Bankruptcy Code governs bankruptcy. Most states have their own list of exemptions that state residents can use to protect their assets from creditors. Washington allows residents to choose between federal and state exemptions when filing for bankruptcy.

To file for bankruptcy using Washington state exemptions, debtors must have lived in the state for 730 days (two years). Otherwise, you must file through the state where you lived before moving to Washington. Filers always have the option of using federal exemptions.

You must also complete a credit counseling course within 180 days of filing your bankruptcy petition. There is a list of approved courses at the Department of Justice Bankruptcy Trustee website. After the bankruptcy is discharged, you must also take a financial management course.

Washington Consumer Bankruptcy

The type of bankruptcy you file determines the assets you can keep and how long your bankruptcy discharge takes. Two types of consumer bankruptcy are the most commonly used. The one you choose depends on your income and whether you have non-exempt assets you want to keep.

Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, also called a liquidation bankruptcy, the bankruptcy trustee takes charge of your property. They’ll sell any non-exempt assets to pay your creditors, while you keep all exempt assets and property.

To qualify for a Chapter 7, you must pass a means test. If your income is below Washington’s median annual income, you automatically qualify for a Chapter 7. If not, the courts look at your total debt and disposable income. If your debt load is higher than you can reasonably pay, you may still qualify for a Chapter 7.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy, or reorganization bankruptcy, lets people who have a steady income create a repayment plan for their debts. Under a Chapter 13, debtors work with the trustee to consolidate their debts and pay them off over a period of three to five years. At the end of the repayment period, any remaining debts may be discharged by the court.

Chapter 13 bankruptcies are preferred by debtors who have valuable non-exempt assets and people who have fallen behind on mortgages because of other unsecured debt and need to erase dischargeable debt while keeping their property. To qualify, you must have a steady income and enough disposable income to make regular monthly payments to your creditors while meeting all your living expenses.

Automatic Stay

As soon as you file either of these bankruptcy petitions, an automatic stay goes into effect. The stay halts all creditor collection activities, including foreclosures, wage garnishment, and lawsuits.

The stay is not permanent. A creditor can file a Motion for Relief from the Automatic Stay to bypass it. In a Chapter 7, the stay gives debtors some breathing room to begin the bankruptcy process. In a Chapter 13, the stay lasts throughout the repayment period as long as you remain current on your payments.

The stay will not stop all creditor actions or prevent wage garnishment for child support and alimony. It provides some space to begin the bankruptcy process and ends harassing phone calls and emails.

Washington Bankruptcy Exemptions

Washington exemptions allow debtors to protect their property up to the value listed in the statutes. These values are amended periodically. Debtors should consider consulting a bankruptcy lawyer when filing for bankruptcy to ensure they receive all of the exemptions they qualify for. Washington lets married couples filing jointly double the state exemptions for their exempt property.

Homestead Exemption

Washington’s homestead exemption applies to any “real or personal property … used as a residence.” The value of the homestead exemption is the greater of the following:

• $125,000
• The county median sale price of a single-family home in the preceding year

The homestead exemption applies to the equity in the home, not to the market value of the home.

Property Exemptions

Property exemption values vary. Filers should always consider getting legal advice before calculating their property exemptions in bankruptcy. As of 2026, you can include these on your petition:

• One motor vehicle to the value of $15,000
• Household goods to the value of $6500
• Clothing including up to $3500 of jewels and furs
• Personal electronics, computers, and cell phones
• Up to 75% of weekly disposable income
• Pensions, retirement accounts, public benefits, child support payments
• “Tools of the trade” exemption to the value of $15,000
• A wildcard exemption, which allows you to exempt up to $10,000 in other personal property that doesn’t fit into one of the other categories

Knowing which exemptions you may qualify for can be confusing. If you feel like you’re in over your head, there’s no shame in speaking with a bankruptcy attorney for assistance.

Effects of Filing Bankruptcy

Filing bankruptcy can eliminate some types of debts, but not all. A Chapter 7 will remove most unsecured debt, such as:

• Credit card debt
• Medical bills
• Personal loans

Chapter 7 will not discharge secured debts, which are those that have a lien against the property. A Chapter 7 bankruptcy cannot stop collection for:

• Student loans (with some exceptions)
• Child support and alimony arrears
• Foreclosure and repossession

In a Chapter 13, secured debts are part of your payment plan. When your payment plan is complete, you should have paid off most of your debts.

Filing for bankruptcy will have a negative effect on your credit rating. How long that lasts depends on the type you filed and if you met all of your requirements. It will be possible for you to rebuild your credit as time passes.

Get Legal Advice From a Washington Bankruptcy Attorney

If you’re considering filing bankruptcy, speaking with an attorney is a good idea. Exemption values are subject to change. An attorney or bankruptcy accountant can ensure you have the correct amount.

The rules about transferring property before filing bankruptcy are strict. An attorney can offer legal advice about exempt and non-exempt property, appear with you at the creditors’ meeting, and help negotiate with creditors during the bankruptcy process. Bankruptcy courts have local rules as well as state and federal regulations. A Washington bankruptcy attorney is essential for a successful bankruptcy case.