The state of Washington’s bankruptcy laws provide protections for those who find they simply cannot pay down their debts. Learn about the process before you begin filing.

Bankruptcy Exemptions

The state of Washington offers two exemption schemes. Debtors must choose the one the most beneficial to their situation. Under the federal scheme, you may keep:

• Up to $20,200 for a home
• Life insurance payments if you depended on the deceased
• Up to $10,775 for life insurance policy with a loan value
• Wrongful death, crime victim’s compensation, public assistance Social Security, unemployment, and veterans’ benefits payments
• Up to $20,200 for tools of the trade
• ERISA qualified benefits, retirement benefits and pensions
• Up to $500 per item for a total of $10,775 for household goods
• Unmatured life insurance contract
• Up to $1,350 for jewelry
• Alimony and child support
• Health aids
• Lost earnings payments
• Up to $3,225 for a vehicle
• Up to $20,200 for personal injury payments
• A wild card exemption for $1,075 of any property and $10,125 of the unused homestead exemption

Under the state’s scheme, you may keep:

• Up to $125,000 for your home
• Up to $2,500 for your vehicle, or $5,000 for two vehicles for your family
• Clothing, with a $1,000 per person limit for luxury clothing items
• Up to $1,500 for books
• Family pictures and keepsakes
• Up to $2,700 ($5,400 for families) for household goods and furniture
• Food and fuel
• Up to $2,000 in personal property, with a $200 cash limit and $200 in other bank accounts
• Child support
• Prescription health aids
• Up to $16,150 for personal injury awards
• Up to $5,000 for tools of the trade
• ERISA-qualified pension benefits
• Public employee pensions
• Assistance programs
• IRAs and annuities
• Public compensation and benefits programs
• Disability proceeds or benefits
• Life insurance proceeds
• Group life insurance policy or proceeds
• Up to $2,500 per month for an annuity
• Business partnership property
• 75 percent of wages
• Up to $5,000 for library and office supplies for a professional
• Up to $5,000 in tools used in another’s trade

Chapter 7 Bankruptcy Information

If you make at or below the median income level in your state, you can file for Chapter 7 bankruptcy protection. This form of bankruptcy eliminates most debts after non-exempt assets are sold to pay creditors.

Chapter 13 Bankruptcy Information

Under Chapter 13 bankruptcy, you will be placed under court supervision as you work to pay off your debts over three to five years. The court works with you to reorganize your debts and limit your expenditures so you can repay your loan on your existing disposable income.