Exemptions (Property You Can Keep)

Individual debtors are entitled to keep some property, or part of the proceeds if the property is sold after your case is filed. The types and how much of this property that can be kept is determined by state law or federal law (the Bankruptcy Code). A debtor can choose to use either the state exemptions or the federal exemptions, but cannot mix and match between the two. You may lose property if you do not use the best set of exemptions for your situation. When a married couple files together, the exemptions are doubled.

In determining whether property is exempt, you must keep a few things in mind:

  • The value of property is not the amount you paid for it, but what it is worth now. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.
  • If the unsecured value of an asset exceeds the value of your exemption, then it can be sold by the trustee and only the exempt amount returned to you.
  • If an item is otherwise exempt, it does not eliminate the interest of a secured creditor. For example, if you own a car or a house that was purchased with a loan from a bank or credit union and the debt is not paid off, your equity (market value less the balance owing) is exempt up to the amount allowed by law, but you will still have to continue to pay for the car or house or the creditor can repossess it.

In a Chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy.

Federal Law – Federal exemptions are set forth in Bankruptcy Code Section 522(d).

State Law – To claim an exemption under Washington law, the debtor must be domiciled in Washington for the 730 day period immediately preceding the filing of the bankruptcy petition. Otherwise, the law of the state where the debtor was domiciled for the 180 days immediately preceding such 730 day period is used.

See the following links for Washington state and federal exemptions:




Exemptions are not automatic. After determining what exemptions apply to your assets, you must list them on Schedule C, otherwise the trustee may sell it and pay all of the proceeds to your creditors. If there are no objections to the exemptions you have listed within 30 days following the conclusion of the meeting of creditors (or within 30 days following the filing of any amended claim of exemption, whichever is later), these assets will not be a part of your bankruptcy estate and will not be used to pay creditors through your bankruptcy case.