What happens to my personal possessions if I file a Washington State bankruptcy? Most of our clients keep all of their possessions. Get answers now!

Keep Your Personal Property in a Washington State Bankruptcy | Exemptions | Bankruptcy Law

Perhaps the thing people considering bankruptcy fear most is the thought of losing their property after filing a bankruptcy.  The fact is that most people do not lose any property in a bankruptcy.  The law protects property from being taken to pay creditors with exemptions.

In Washington, you can choose between federal and state law when claiming exemptions.   If you are making payments for something, such as a house or a car, you can usually keep this property if you make the payments.   A bankruptcy can free up cash flow by getting rid of some debts so you can make these payments.

The exemptions in bankruptcy are broken down by the type of property.  For example, retirement accounts are completely exempt under both Washington and federal law.  Car exemptions are approximately $3,500 under both. Washington homestead exemption, which protects equity in a home, is $125,000, which is much higher than the federal exemption.

However, the federal “wildcard” exemption is as high as $11,975, which is much higher than the state exemption. Both offer separate exemptions for personal injury suits, tools of the trade, back public benefits and household goods, to name a few. It is important to talk to an experienced bankruptcy attorney for advice on how to best protect your property with exemptions.

It is a mistake to transfer property out of your name in anticipation of filing bankruptcy.  This transfer could be considered fraud and the person you transfer it to could be sued by the trustee.   You cannot claim an exemption on the property after you have transferred it.  Even if the transfer was not fraudulent, if the trustee can prove it made it impossible for you to pay your debts, then the person you transferred the property to can be sued.

A Chapter 13 offers more protection for property. If you have some property that can not be covered by exemptions (or if you transferred property and you don’t want the person who received it to be sued) you can pay what the unsecured creditors would have received through a payment plan.  A Chapter 13 allows a way to pay car loans and get caught up on mortgages as well.

Perhaps the thing people considering bankruptcy fear most is the thought of losing their property after filing a bankruptcy.  The fact is that most people do not lose any property in a bankruptcy.  The law protects property from being taken to pay creditors with exemptions. In Washington, you can choose between federal and state law when claiming exemptions.  If you are making payments for something, such as a house or a car, you can usually keep this property if you make the payments.  A bankruptcy can free up cash flow by getting rid of some debts so you can make these payments.

The exemptions in bankruptcy are broken down by the type of property.  For example, retirement accounts are completely exempt under both Washington and federal law.   Car exemptions are approximately $3,500 under both. Washington homestead exemption, which protects equity in a home, is $125,000, which is much higher than the federal exemption.

However, the federal “wildcard” exemption is as high as $11,975, which is much higher than the state exemption.  Both offer separate exemptions for personal injury suits, tools of the trade, back public benefits and household goods, to name a few.   It is important to talk to an experienced bankruptcy attorney for advice on how to best protect your property with exemptions.

It is a mistake to transfer property out of your name in anticipation of filing bankruptcy.  This transfer could be considered fraud and the person you transfer it to could be sued by the trustee.  You cannot claim an exemption on the property after you have transferred it.  Even if the transfer was not fraudulent, if the trustee can prove it made it impossible for you to pay your debts, then the person you transferred the property to can be sued.

A Chapter 13 offers more protection for property.  If you have some property that can not be covered by exemptions (or if you transferred property and you don’t want the person who received it to be sued) you can pay what the unsecured creditors would have received through a payment plan.   A Chapter 13 allows a way to pay car loans and get caught up on mortgages as well.