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keep my house in bankruptcyEvery Washington state bankruptcy debtor who files bankruptcy is allowed to protect most of their personal items through the use of bankruptcy rules called exemptions.  These exemptions help protect personal assets such as household goods, a vehicle or home when filing for bankruptcy. In Washington, debtors may use state or federal exemptions to protect their goods. Washington state bankruptcy exemptions allow for a debtor to protect $3,250 in equity towards a vehicle per person/per vehicle and $125,000 in equity towards a home. Federal exemptions allow for $4,000 of equity on a vehicle and $22,975 of equity in a home and there is something called a wild card exemption which can be used on any items or bank accounts along with other exemptions worth $12,725. If you have a lot of equity in your home, Washington State exemptions are the way to go to get the maximum protection possible in your home.  A bankruptcy trustee won’t sell your home if they don’t stand to make a profit from the sale after all expenses are taken out.  If the trustee does determine there is equity in excess of your exemptions after factoring in liquidation costs, you may choose to make payments to the bankruptcy trustee to keep your items if necessary.

Another question debtors often ask after they have filed for bankruptcy is whether they should sign a a reaffirmation agreement with their lender to keep their items.  Generally debtors should never sign a reaffirmation agreement on a home or a vehicle unless better terms are offered by the bank.  Debtors should also know that some creditors will say that they won’t report your payments to credit agencies unless you sign a reaffirmation agreement with them but that is often not outweighed by the fact that if you sign a reaffirmation agreement you will be liable for the debt post bankruptcy and may be sued for it if you become delinquent again.

If you have additional questions about whether you will be able to keep your home or vehicle in bankruptcy please call 206-682-7975 to speak to a bankruptcy attorney at Symmes Law Group about your case.

  • Richard Symmes

    Hi, Richard here

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