What Happens to My Property After Declaring Bankruptcy?

By S.M. Oliva | Last updated on July 1, 2025

Many people are nervous about filing a bankruptcy case because they fear losing what little they have left. But the purpose of bankruptcy discharge is not to leave a debtor with nothing. On the contrary, federal and Washington state laws allow a debtor to “exempt” or protect a certain amount of property from creditors and the bankruptcy court.

Federal or Washington Exemptions?

The federal Bankruptcy Code spells out a list of exemptions for all debtors filing for protection under Chapter 7 or Chapter 13. But each individual state can create its own set of bankruptcy exemptions, and decide whether its residents must use the state or have a choice.

Washington bankruptcy laws fall into the latter category. The debtor has the option of using the state or federal exemptions when they file bankruptcy. Keep in mind, this is an either-or choice. You cannot take some exemptions from the federal list and “mix and match” them with items from the state list.

Find top Bankruptcy lawyers easily

Connect with a qualified attorney today.

Find a lawyer today

Your Home and Tangible Personal Property

For many people, the most important is the homestead exemption is the most important, or primary residence. Washington exempts up to $125,000 in equity in real property or a mobile home. This is significantly more generous than the federal exemption of $23,675.

The other major item of concern for most debtors is their car. Washington exempts a single vehicle up to $3,250 in value or, for a community (couple), two vehicles worth up to $6,500.

Other tangible personal property exemptions in Washington include:

  • All everyday “wearing apparel”;
  • No more than $3,500 in furs, jewelry, and “personal ornaments”;
  • Private libraries, including electronic media (e.g., DVDs), up to $3,500;
  • All family pictures and keepsakes;
  • Household goods, appliances, furniture, and yard equipment, up to $6,500 for a single person or $13,000 for a couple, provided no individual item is worth more than $750.

Wages, Savings, and Wildcard Items

But what about intangible items, such as paychecks and savings? Wages are exempt based on a simple formula: You can keep the greater of 75 percent of your “disposable” earnings or 30 times the federal minimum wage (which works out to $217.50 per week).

For savings, there are many types of accounts that are exempt entirely from bankruptcy, including health savings accounts, tax-exempt retirement accounts, IRAs and Roth IRAs, and civil service pensions. Most public and court-ordered assistance is also exempt, including unemployment benefits and alimony.

Finally, Washington allows a “wildcard” exemption of $3,000 for any kind of property, but no more than $1,500 may be used to protect cash and securities.

Consult with a bankruptcy attorney if you have questions or need legal advice about the bankruptcy process, debt relief or deciding between filing Chapter 7 bankruptcy or Chapter 13 bankruptcy. 

Was this helpful?

What do I do next?

Enter your location below to get connected with a qualified attorney today.
Popular attorney searches: Business/Corporate Collections
0 suggestions available Use up and down arrow keys to navigate. Touch device users, explore by touch or with swipe gestures.

At Super Lawyers, we know legal issues can be stressful and confusing. We are committed to providing you with reliable legal information in a way that is easy to understand. Our legal resources pages are created by experienced attorney writers and writers that specialize in legal content in consultation with the top attorneys that make our Super Lawyers lists. We strive to present information in a neutral and unbiased way, so that you can make informed decisions based on your legal circumstances.

0 suggestions available Use up and down arrow keys to navigate. Touch device users, explore by touch or with swipe gestures.

Find top lawyers with confidence

The Super Lawyers patented selection process is peer influenced and research driven, selecting the top 5% of attorneys to the Super Lawyers lists each year. We know lawyers and make it easy to connect with them.

Find a lawyer near you