Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Washington. However, state law plays an important role, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Before you file for Chapter 7 or Chapter 13 bankruptcy in Washington, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of agencies in Washington that have been approved to provide this counseling.
Where to File
In the Western District of Washington, the bankruptcy courts are located in Seattle and Tacoma. In the Eastern District of Washington, the bankruptcy courts are located in Spokane and Yakima. Click on the district court links to find information on forms, local rules, and more.
Like every other state, Washington has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
In Washington, you may use either the Washington state exemptions, or the federal bankruptcy exemptions.
Washington has a homestead exemption of up to $125,000. Washington’s personal property exemptions include: up to $3,250 in one motor vehicle and to $6,500 in two for the community; appliances, household items, furniture, and home and yard equipment to $6,500 for an individual and to $13,000 for the community; tools of trade to $10,000, and personal injury recoveries to $20,000. Here’s a list of Washington exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Washington. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median Washington income for a one-person household is just over $51,500; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of agencies approved to provide this course in Washington.
Getting Help From a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Washington bankruptcy lawyer.