Washington State Bankruptcy Exemptions in 2023

This is an important blog post to read for anyone worried about their assets being seized in a Chapter 7 bankruptcy filing. First, Governor Inslee signed the Fair Shot Act into law. This law beefs up the exemption amounts of Washington state residents [note: you must have been domiciled in Washington for the two years prior to the filing of your case]. Second, please read this post and make a note of what’s relevant to your situation. If you have any questions or concerns, definitely reach out to me for a free consultation.

Bankruptcy exemptions in Washington

1. To receive the Homestead exemption, you must own your homestead property for at least 1,215 days before the bankruptcy filing.

2. To claim an exemption under Washington law, you (the debtor) must be domiciled in Washington for the 730 day period immediately preceding the filing of the bankruptcy petition. Otherwise, the law of the state where you (the debtor) were domiciled for the 180 days immediately preceding such 730 day period is used. [Source]

3. Exemptions are not automatic. After determining what exemptions apply to your assets, you must list them on Schedule C, otherwise the trustee may sell it and pay all of the proceeds to your creditors. If there are no objections to the exemptions you have listed within 30 days following the conclusion of the meeting of creditors (or within 30 days following the filing of any amended claim of exemption, whichever is later), these assets will not be a part of your bankruptcy estate and will not be used to pay creditors through your bankruptcy case. [Source]

4. Governor Inslee recently signed The Fair Shot Act, which increases several exemptions.

Homestead Exemption (Current as of January 2024)

• FEDERAL

  • $27,900 individuals

  • $55,800 for spouses who co-own property.

  • per 11 USC § 522(d)(1). Note: amounts are valid between April 1, 2022, and March 31, 2025

• WASHINGTON (Eastern/Central, current as of January 2024)

  • Adams: $299,200

  • Asotin: $292,500

  • Benton: $440,300

  • Chelan: $589,200

  • Columbia: $269,400

  • Douglas: $458,100

  • Ferry: $237,500

  • Franklin: $440,300

  • Garfield: $207,100

  • Grant: $357,100

  • Kittitas: $567,500

  • Klickitat: $387,100

  • Lincoln: $239,300

  • Okanogan: $352,500

  • Pend Oreille: $322,800

  • Spokane: $440,000

  • Stevens: $322,800

  • Walla Walla: $422,900

  • Whitman: $393,000

  • Yakima: $351,000

Motor Vehicle Exemption

• FEDERAL: $4,450, per 11 USC § 522(d)(2)

• WASHINGTON: $15,000, per person. $3,250, per Wash. Rev. Code §§ 6.13.010(1)(d)(iii)

Tools of the Trade Exemption

• FEDERAL: $2,800, per 11 USC § 522(d)(6)

• WASHINGTON: $15,000, per Wash. Rev. Code §§ 6.15.010(1)(e)(i), (ii), (iii)

Wildcard Exemption

• FEDERAL: $1,475, and unused homestead exemption up to $13,950, per 11 USC § 522(d)(5)

• WASHINGTON: $10,000 $3,000 of any personal property of your choosing, but not more than $1,500 in cash or $500 in bank deposits; however, filers with consumer debt can have $2,000 in bank accounts, and filers with student loans can protect $2,500 in bank accounts., per Wash. Rev. Code §§ 6.15.010(1)(a) - (1)(f)

Personal Property Exemptions

• FEDERAL:

  • $700 per item / $14,875 total for animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments.

    • jewelry up to $1,875

    • health aids

    • lost earning payments

    • personal injury recoveries to $27,900 (excludes pain and suffering and pecuniary loss)

    • wrongful death recoveries for a person on whom you depended

    • alimony and child support needed for support

    • per 11 USC § 522(d)(3)-(6),(9)-(11)

• WASHINGTON:

  • Effective 7/23/23: “Pursuant RCW 6.15.010(1)(d), each married person of a spousal community is now ‘entitled to his or her own exemptions in this subsection…’ In effect, this amendment doubles the personal property exemptions available to a marital community.” [Source]

    • $750 per item / $6,500 total for household goods, furnishings, and provision

      • clothing (jewelry, furs, ornaments limited to $3,500 per person)

      • mobile phone, personal computer/laptop, and printer

      • pictures/keepsakes

      • books and electronic media to $3,500 per person

      • prescribed health aids

      • prepaid tuition

    • personal injury awards are fully exempt, except under certain circumstances. up to $20,000

      • per Wash. Rev. Code §§ 6.15.010(1)(a) - (1)(f); see also: RCW 6.15.010(1)(d).

Retirement Accounts

• FEDERAL:

  • tax-exempt retirement accounts

    • IRA and Roth IRA up to $1,512,350

    • 11 USC §§ 522(b)(3)(C),(b)(3)(C)(n)

    • Note: These are exempt under the federal rules even if the filer uses state exemptions.

• WASHINGTON:

  • annuities

  • federal pension benefits (except child support)

  • retirement and pension benefits (except spousal and child support)

  • per Wash. Rev. Code §§ 6.15.020(1) - (3)