The Washington Homestead Exemption exists to protect individuals from losing their homes to creditors. Debtors seeking chapter 7 bankruptcy relief could previously protect up to $125,000.00 in equity in their primary residence. However, as property values have risen over the years, the Homestead Exemption has remained the same at $125,000.00, which has left many exposed to the risk of losing their home to liquidation in a bankruptcy filing. In an effort to keep debtors from losing their homes in a bankruptcy filing, Gov. Inslee signing into law SB 5408 which increases the homestead exemption from a static $125,000.00 to the greater of $125,000.00 or the county’s average home price based on data from the previous years’ home sales. In Kitsap County, the median sales price for Q4 2020 was $438,300, which almost quadruples the homestead exemption for filers in Kitsap County. Jefferson and Clallam Counties will also benefit from a dramatic increase in homestead exemption.
Individuals will no longer have to choose between bankruptcy protection and losing their home. Call our office today for a free consultation to discuss whether a bankruptcy filing is the right solution for you.