📅 2026 Update: Key Changes in Washington Bankruptcy Law

Since the original article was published, there have been some important updates to bankruptcy laws in Washington. These changes affect various aspects of bankruptcy, including debt limits and filing fees. Readers can find more detailed information in the earlier sections of this article.

📉 Subchapter V Debt Limit Reduction

Effective June 22, 2024, the debt limit for Subchapter V of Chapter 11 cases decreased significantly. The new limit is $3,024,725, down from the previous $7.5 million. This change aims to help small businesses navigate bankruptcy more effectively by reducing the threshold for eligibility.

💳 Chapter 13 Debt Eligibility Adjustment

Also on June 22, 2024, adjustments were made to Chapter 13 eligibility. The maximum unsecured debt allowed is now $465,275, while the maximum secured debt limit is $1,395,875. This separation of debt limits offers clearer guidelines for individuals considering this type of bankruptcy.

💵 Current Bankruptcy Filing Fees

The filing fees for bankruptcy cases have been updated. The Chapter 7 filing fee is now $338, including a $245 filing fee, an $78 administrative fee, and a $15 trustee surcharge. For Chapter 13 cases, the fee is $313, with a $235 filing fee and a $78 administrative fee.

Both Chapter 11 and Subchapter V have a filing fee of $1,738.

⏰ Processing Times

For those filing for bankruptcy, standard document processing typically takes 7 to 10 business days. Expedited processing is available at an additional cost, with a quicker turnaround of 2 to 3 business days. This can be beneficial for those needing rapid resolution.

📌 Key Changes Summary

  • 📉 Subchapter V debt limit dropped to $3,024,725.
  • 💳 Chapter 13 unsecured debt limit is now $465,275.
  • 💵 Chapter 7 filing fee is $338; Chapter 13 is $313.
  • ⏰ Standard processing takes 7 to 10 days; expedited is 2 to 3 days.

💡 Tips for Navigating Washington Bankruptcy

It's important to discuss your specific situation with your attorney to understand your options fully.

📄 Understand Your Debt Types

Knowing which debts are dischargeable can help in planning your bankruptcy strategy. Common dischargeable debts include credit card debt, medical bills, and personal loans.

🏠 Look Into Exemptions

In Washington, the homestead exemption can protect your home equity. The exemption is the greater of $125,000 or the county median sale price of a single-family home from the previous year.

📋 Complete Credit Counseling

Before filing for bankruptcy, you must complete credit counseling within 180 days. This is a requirement that helps you explore options besides bankruptcy.

🕒 File on Time

Make sure to file your bankruptcy petition in a timely manner. Late filings can lead to complications, including delays in the automatic stay that protects you from creditors.

📚 Use Available Resources

Take advantage of nonprofit organizations for financial counseling. These groups can provide useful information and guidance at no cost.

💼 Consider Payment Plans

If you find the filing fees to be a burden, you may request to pay them in installments. This option can make the process more manageable.

❓ Frequently Asked Questions

❓ What is the means test for Chapter 7?

The means test determines eligibility for Chapter 7 based on your income and expenses. If your income exceeds the state median, you may not qualify.

🚫 What debts cannot be discharged in bankruptcy?

Certain debts, like student loans and child support, are generally not dischargeable. This means you will still be responsible for them after bankruptcy.

🏠 How does bankruptcy affect my home?

Filing for bankruptcy may protect your home through exemptions, depending on your equity. However, if you are behind on payments, you may still face foreclosure.

📅 How long does bankruptcy stay on my credit report?

Bankruptcy can stay on your credit report for up to 10 years for Chapter 7 and 7 years for Chapter 13. This can impact your ability to obtain new credit.

📜 Can I file for bankruptcy multiple times?

Yes, you can file for bankruptcy more than once, but there are time limits. You must wait a certain period between filings to receive a discharge.

🔄 What happens to my assets in bankruptcy?

In Chapter 7, non-exempt assets may be sold to pay creditors. In Chapter 13, you typically keep your assets but must follow a repayment plan.

⚖️ Recent Cases Related to Bankruptcy

Recent court rulings have clarified various aspects of bankruptcy law in Washington. These rulings can impact how bankruptcy cases are handled and what protections are available to debtors.

For more information on recent rulings, check out more rulings on the news page.

End of October 2026 Update






 



Washington Bankruptcy Law



 

Washington Bankruptcy


Washington bankruptcy practices  laws that match federal laws and closely reflect some other state’s laws.  Every state is unique when it comes to bankruptcy.  Some states are stricter, and some states are more lenient when it comes to what exemptions they allow and what types of bankruptcy they offer.  The state of Washington allows more exemptions than other states, but there’s no guarantee an individual or family can even receive these exemptions.  



 



Washington Bankruptcy : Personal and Corporate



 



If a person or family want so file for Washington bankruptcy, they will either choose or be forced to file for either Chapter 7 or Chapter 13.  If a corporation faces economic hardship, it may choose to file for Chapter 11.  



 



WA Bankruptcy : Chapter 7



 



Chapter 7 bankruptcy works most efficiently for individuals or families with extremely large amounts of unsecured debt and low means to income.  In order to qualify for Chapter 7, a person must pass a means test.  The test examines the person’s annual income and even their living expenses.  A person’s annual income must fall below the average household income in Washington, which is $55,584. 



 



In recent years, and on a nationwide scale, it has become harder and harder to file for Chapter 7, but higher numbers of individuals are still allowed to file in Washington because of the state’s fairly high unemployment rate around 9.6%.  If a person or family qualifies for Chapter 7, they may be entitled to the following exemptions:



 



• $125,000 homestead



• At least 75% of weekly earnings



• Vehicle up to $3,250 for individual



• Farming equipment up to $10,000



• Various pieces of personal property



• Food and fuel for comfortable living



• Wildcard up to $3,000



 



WA Bankruptcy : Chapter 11



 



If a corporation faces economic instability, the owner may choose to file for Chapter 11 bankruptcy.  This measure allows the company to gather its finances, rearrange employees, and change essential logistics in order to allow for greater profit and less debt.  The owner of the company usually oversees the initiative and reports back to a creditor and judge.  



 



WA Bankruptcy : Chapter 13



 



A person or family can either choose or be forced to file for Chapter 13 bankruptcy if their household income falls above the state average and they can afford to make monthly payments.  The greatest advantage to filing Chapter 13 involves a person being able to keep their home and assets while repaying up to 25% of their acquired debt over the next three to five years.  



 



Taxes



 



If a person files under Chapter 7, federal and state tax returns may be collected by a creditor.  These assets are generally safe under Chapter 13, though.  Backed taxes to the IRS or similar collection agency usually are not cleared by Washington bankruptcy. 



 



Filing for Washington Bankruptcy



 



Like in most other states, a citizen of Washington must complete a credit counseling course six months before filing for Washington bankruptcy, and they must also show evidence of taking a debtor education before reaching a settlement.



 



You should also greatly consider hiring a lawyer if considering WA bankruptcy.  A qualified  Washington bankruptcy attorney can help you submit the right documents at the right time, and they can also help you reach the best settlement possible with your creditors.  Your lawyer can help you submit the following documents: 



 



• Petition



• Attorney certificate



• Proof of income



• Proof of net monthly income



• Anticipated changes in income



• Educational individual retirement account



• Tax returns from most recent to as far back as four years