Bankruptcy and Your Possessions

Keeping your assets with Washington State bankruptcy protection.

Before liquidating your own assets, learn about how you may keep your possessions with Washington State bankruptcy protection.

If you are considering bankruptcy in Washington State, most likely you do not have any possessions that are at risk. Many people try any option before considering bankruptcy. They may sell necessities or cash in a retirement plan. Before liquidating your own assets to take care of debt, you should learn how those assets can be protected in a bankruptcy. You do not want to deprive yourself of the basics in a desperate attempt to wipe out debt when bankruptcy could be a more reasonable option.

Bankruptcy laws in Washington State.

The law exempts the property needed for an effective fresh start. The exemptions are broken down by type of property. There are separate exemptions for home equity, cars, household goods, retirement plans, public aid benefits and jewelry, to name a few.

In Washington, you can choose between state and federal exemptions. State exemptions are better for someone who has a lot of home equity. Federal exemptions are usually better from someone who rents or has not home equity. That is because federal exemptions allow up to $11,975 in a “wildcard” exemption if you do not need to use a homestead exemption. However, Washington’s homestead exemption is much more generous, protecting $125,000 in home equity. Both will protect 100% of a retirement plan.

Can you keep more of your possessions with a Chapter 7 or Chapter 13 bankruptcy?

If you happen to have un-exempt property that would be sold in a Chapter 7, you can protect it by filing a Chapter 13. You need to be able to pay the same amount that would have been liquidated within five years. For instance, if you had $30,000 of un-exempt property, you could pay $500 per month over five years (60 months) in a Chapter 13 instead of losing the property.

If you are making payments on a car or house, or are making installments on a different big ticket item, you can keep the property if you continue to make payments. In a Chapter 7, you just need to keep making the payments. You can reaffirm these debts in a Chapter 7, which means signing a new agreement that excludes the debt from the discharge. Signing a reaffirmation agreement is risky because of the risk of default. However, keeping up on the payments can be a way of reestablishing your credit rating.

A Chapter 13 allows you to keep property you are buying in installments. You can catch up on a mortgage and restructure a car loan in Chapter 13. As long as you keep up with your Chapter 13 plan payments and the property is insured, you can keep the property and the creditors cannot take action against you.

FREE phone consultation – speak with a knowledgeable bankruptcy lawyer in Tacoma, WA from our law firm today!

We understand that it’s important to you to be able to keep your assets through the bankruptcy process. For questions regarding bankruptcy and your possessions, please contact our Tacoma bankruptcy attorneys from our firm today to see if you qualify, and to learn more about what actions you can take to preserve your assets.

(253) 444-5869