Washington Bankruptcy Exemptions for 2019

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Federal Exemptions

• Real property, including co-op or mobile home, or burial plot to $25,150; unused portion of homestead to $12,575 may be applied to any property
  11 U.S.C. § 522 (d)(1), (d)(5)
  
  
  
  
  (retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986)
  (For assets in individual retirement accounts described in section 408 or 408A of the Internal Revenue Code of 1986, other than a simplified employee pension under section 408(k) of such Code or a simple retirement account under section 408(p) of such Code)
  
  
  
  
  
  
  
  
  
  (Earned Income Tax Credit is federal no local, so not exempt)
  
  
  
  
  
  
  
  
  

Washington Exemptions

• WA Exemptions
• Must record homestead declaration before sale of home if property unimproved or home unoccupied
  Wash. Rev. Code Ann. § 6.13.040
  
• Real property, manufactured home, or mobile home to $125,000; unimproved property intended for residence to $15,000 (husband and wife may not double)
  Wash. Rev. Code Ann. § 6.13.010
  Wash. Rev. Code Ann. § 6.13.030
  

Federal Exemptions

• Disability, illness, or unemployment benefits
  11 U.S.C. § 522 (d)(10)(C)
  
• Life insurance payments from policy for person you depended on, needed for support
  11 U.S.C. § 522 (d)(11)(C)
  
• Life insurance policy loan value, in accured dividends or interest, to $13,400
  11 U.S.C. § 522 (d)(8)
  
• Unamtured life insurance contract, except credit insurance policy
  11 U.S.C. § 522 (d)(7)
  

Washington Exemptions

• Annuity contract proceeds to $3,000 per month
  Wash. Rev. Code Ann. § 48.18.430
  
• Disability proceeds, avails, or benefits
  Wash. Rev. Code Ann. § 48.18.400
  
• Fraternal Benefit Society Benefits
  Wash. Rev. Code Ann. § 48.36A.180
  
• Group life insurance policy or proceeds
  Wash. Rev. Code Ann. § 48.18.420
  
• Life insurance proceeds or avails if beneficiary is not the insured
  Wash. Rev. Code Ann. § 48.18.410
  

Federal Exemptions

• Alimony, child support needed for support
  11 U.S.C. § 522 (d)(10)(D)
  

Washington Exemptions

• Child support payments
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(iv)
  
• Separate property of non-debtor spouse
  Wash. Rev. Code Ann. § 26.16.200
  Wash. Rev. Code Ann. § 6.15.040
  

Special Rules for Retirement Accounts

Under a new provision of the bankruptcy law, enacted in October 2005, virtually all types of pension and retirement accounts recognized by the IRS are completely exempt regardless of what state you live in.

This provision exempts"retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under Sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code."

This list covers 401(k)s, 403(b)s, profit-sharing and money purchase plans, IRAs (including SEP and SIMPLE plans), as well as defined-benefit plans.

The exemption applies whether you rely on the list of federal bankruptcy exemptions (11 U.S.C. 522(d)(12)) or the exemption laws of your own state (See 11 U.S.C. 522(b)(3)(C)). Section 522(b)(4) spells out the specific requirements for qualifying under these provisions.

These exemptions are unlimited, except for Roth and traditional IRAs, which are capped at an aggregate IRA account value of $1 million per individual (adjusted every three years for inflation). (See 11 U.S.C. 522(n))

SEP and SIMPLE IRAs, along with all other types of non-IRA retirement accounts such as 401(k)s and 403(b)s, are completely exempt.

More Info

For more details, see an excellent summary of how retirement accounts are treated under the new bankruptcy law from the August 2005 issue of the Journal of Financial Planning.

References to the Internal Revenue Code

The new bankruptcy law exemption for retirement accounts includes all funds "exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986."
Those sections cover:

• 401 (a qualified pension, profit-sharing and stock bonus plan created under a trust established by an employer for the exclusive benefit of employees or beneficiaries)
• 403 (qualified annuity plans that are established by an employer for an employee under IRC 404(a)(2) or 501(c)(3))
• 408 (IRAs)
• 408A (Roth IRAs)
• 414 (other retirement plan for controlled groups of employees such as churches, partnerships, proprietorships, and governments)
• 457 (eligible deferred compensation plans) or
• 501(a) (retirement plans established and maintained by tax-exempt organizations, e.g. churches, nonprofit organizations)

Special 'exclusion' of education accounts

Under the new bankruptcy law, education savings accounts or education IRAs created under sections 529 or 530 of the Internal Revenue Code are 'excluded' from the bankruptcy estate (not quite the same as 'exempt' but with the same result).

See, 11 U.S.C. 541(b)(6), (529 Education Tuition Plans) and 11 U.S.C. 541(b)(5) (530 Coverdell IRAS)

NOTE: Even though these education accounts are excluded from the bankruptcy estate, you still must list them on your forms (See section (11 U.S.C. 521(c).)

Also excluded are:

• benefits governed by ERISA (Click here for government info on ERISA and pension.)
• 414(d)(governmental retirement plans),
• IRC 457 (deferred compensation)
• 403(b)( tax deferred annuity plan including church plans, etc)

See 11 U.S.C. 541(b)(7)

Federal Exemptions

• All types of retirement funds and accounts that tax-exempt under IRC section 401, 403, 408, 408A, 414, 457, or 501(a) ; IRAs & Roth IRAs limited to $1,362,800 (excluding rollover contributions); limitation can be overidden by judge.
  11 U.S.C. § 522 (d)(12)
  11 U.S.C. § 522 (n)
  

Washington Exemptions

• City employees
  Wash. Rev. Code Ann. § 41.28.200
  Wash. Rev. Code Ann. § 41.44.240
  
• ERISA-qualified benefits, IRAs, & Keoghs
  Wash. Rev. Code Ann. § 6.15.020
  
• Judges
  Wash. Rev. Code Ann. § 2.10.180
  Wash. Rev. Code Ann. § 2.12.090
  
• Law enforcement officials & firefighters
  Wash. Rev. Code Ann. § 41.26.053
  
• Police officers
  Wash. Rev. Code Ann. § 41.20.180
  
• Public & state employees
  Wash. Rev. Code Ann. § 41.40.052
  
• State patrol officers
  Wash. Rev. Code Ann. § 43.43.310
  
• Teachers
  Wash. Rev. Code Ann. § 41.32.052
  
• Volunteer firefighters
  Wash. Rev. Code Ann. § 41.24.240
  

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Federal Exemptions

• Animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments to $625 per item, $13,400 total
  11 U.S.C. § 522 (d)(3)
  
• Health aids
  11 U.S.C. § 522 (d)(9)
  
• Jewelry to $1,700
  11 U.S.C. § 522 (d)(4)
  
• Lost earnings payments
  11 U.S.C. § 522 (d)(11)(E)
  
• Motor vehicle to $4,000
  11 U.S.C. § 522 (d)(2)
  
• Personal injury recoveries to $25,150 (not to include pain & suffering or pecuniary loss)
  11 U.S.C. § 522 (d)(11)(D)
  
• Wrongful death recoveries for person you depended on
  11 U.S.C. § 522 (d)(11)(B)
  

Washington Exemptions

• Appliances, furniture, household goods, home & yard equipment to $6,500 total for individual ($13,000 for community) per-item limit of $750.
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(i)
  
• Books & electronic media to $3,500
  Wash. Rev. Code Ann. § 6.15.010 (1)(b)
  
• Burial ground
  Wash. Rev. Code Ann. § 68.24.220
  
• Burial plots sold by nonprofit cemetery association
  Wash. Rev. Code Ann. § 68.20.120
  
• Clothing, no more than $3,500 in furs, jewelry, ornaments
  Wash. Rev. Code Ann. § 6.15.010 (1)(a)
  
• Fire insurance proceeds for lost, stolen, or destroyed exempt property
  Wash. Rev. Code Ann. § 6.15.030
  
• Food & fuel for comfortable maintenance
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(i)
  
• Health aids prescribed
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(v)
  
• Keepsakes & family pictures
  Wash. Rev. Code Ann. § 6.15.010 (2)
  
• Motor vehicle to $3,250 total for individual (two vehicles to $6,500 for community)
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(iii)
  
• Personal injury recoveries to $20,000
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(vi)
  
• Spendthrift trusts
  Wash. Rev. Code Ann. § 6.32.250
  Erickson v. Bank of California, 643 P2d 670 (1982 )
  In re Finley, 286 B.R 163 (2002 )
  
• Tuition credits under state law, or IRS-qualified (529, 530) tuition savings plans
  Wash. Rev. Code Ann. § 6.15.010 (1)(e)
  

Federal Exemptions

• Crime victims' compensation
  11 U.S.C. § 522 (d)(11)(A)
  
• Local public assistance
  11 U.S.C. § 522 (d)(10)(A)
  In re Goertz, 202 B.R. 614 (Bankr.S.D.Mo. 1996)
  
• Social Security
  11 U.S.C. § 522 (d)(10)(A)
  
• Unemployment compensation
  11 U.S.C. § 522 (d)(10)(A)
  
• Veteran's benefits
  11 U.S.C. § 522 (d)(10)(A)
  

Washington Exemptions

• Child welfare
  Wash. Rev. Code Ann. § 74.13.070
  
• Crime victims' compensation
  Wash. Rev. Code Ann. § 7.68.070 (10)
  
• General assistance
  Wash. Rev. Code Ann. § 74.04.280
  
• Industrial insurance (workers' compensation)
  Wash. Rev. Code Ann. § 51.32.040
  
• Old-age assistance
  Wash. Rev. Code Ann. § 74.08.210
  
• Unemployment compensation
  Wash. Rev. Code Ann. § 50.40.020
  

Federal Exemptions

• Implements, books, & tools of trade to $2,525
  11 U.S.C. § 522 (d)(6)
  

Washington Exemptions

• Farmer's trucks, stock, tools, seed, equipment, & supplies to $10,000 total
  Wash. Rev. Code Ann. § 6.15.010 (1)(d)(i)
  
• Library, office furniture, office equipment, & supplies of physician, surgeon, attorney, clergy, or other professional to $10,000 total
  Wash. Rev. Code Ann. § 6.15.010 (1)(d)(ii)
  
• Tools & materials used in any other trade to $10,000
  Wash. Rev. Code Ann. § 6.15.010 (1)(d)(iii)
  

Federal Exemptions

• None
  11 U.S.C. § 522 (d)
  

Washington Exemptions

• Earnings of work release prisoners
  Wash. Rev. Code Ann. § 72.65.060
  
• Minimum 75% of weekly disposable earnings or 30 times the federal minimum hourly wage, whichever is greater; bankruptcy judge may authorize more for low-income debtors
  Wash. Rev. Code Ann. § 6.27.150
  

Federal Exemptions

• $1,325 of any property
  11 U.S.C. § 522 (d)(5)
  
• Up to $12,575 of unused homestead exemption amount, for any property.
  11 U.S.C. § 522 (d)(5)
  

Washington Exemptions

• $3,000 of any personal property (no more than $1,500 in cash, $500 bank deposits, bonds, stocks, & securities/$200 limit if debt owed to state agency)
  Wash. Rev. Code Ann. § 6.15.010 (1)(c)(ii)