Washington residents who may be contemplating filing for Chapter 7 bankruptcy have more options than debtors in some other states. Here in Washington, those filing under Chapter 7 can decide whether to use the federal or state exemptions regarding the personal property they retain.
Having choices when facing bankruptcy is definitely a good thing for Washington debtors. Read on to learn more about how those choices can affect your debt reduction strategy.
Washington has some liberal exemptions
Determining which set of exemptions to use depends on the circumstances of your individual or marital finances (if filing jointly with your spouse). Therefore, you need to learn which exemptions can benefit your situation.
For instance, according to Wash. Rev. Code §§ 6.15.010(1)(a) – (1)(f), the state’s wildcard exemption allows Chapter 7 filers to hang on to as much as $10,000 of the personal property they choose in a bankruptcy. They may also keep a cushion of up to $2K in their bank accounts. Those who receive student loans can save $2,500 of these funds.
Some federal exemptions could fit better
If you are awaiting a personal injury settlement, the federal exemption is generally higher than Washington state — $27,900 (federal) versus $20,000 (Washington). As with most decisions, the correct choice is situation-dependent.
How to know which exemptions to choose?
It’s understandable to be unsure of your next move when faced with mounting bills that you can never pay off. Your legal team can review your circumstances and offer you a recommendation.
Find the path to financial freedom that a completely debt-free slate can provide by filing for a Chapter 7 bankruptcy here in Washington.