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Exemptions from Execution in Washington State
Washington’s State Legislature has provided numerous exemptions from execution of judgments. These also protect property in bankruptcy if the debtor elects state exemptions over the federal bankruptcy exemptions. What follows is a generalized summary of the most common exemptions. Several have important conditions and exceptions that are not discussed. If the value of an asset exceed the maximum exemption, the difference usually must be paid to creditors in order to keep the asset. If it is sold, the proceeds up to the maximum goes to the debtor. In bankruptcy, the debtor can chose either the Washington Exemptions or Federal Exemptions schedule.
A homestead is real or personal property which is the debtor’s principal residence (RCW 6.13.010). The exemption is $125,000 for land, mobile homes, and improvements; $15,000 for other personal property used as homestead (RCW 6.13.030). The amount is not doubled for community property, a spouse or domestic partner. However, if the spouse or domestic partner files bankruptcy more than 6 months later than the other, both receive the full exemption (RCW 16.13.080 (3). If homestead property is sold, the proceeds are entitled to the same protection as homestead property (RCW 16.13.180). There is an exception for child support obligations.
All retirement accounts are protected from creditors (except child support obligations) including Keogh and IRAs (RCW 16.15.020 (4)).
All wearing apparel is exempt except the exemption for furs, jewelry, and personal ornaments is limited to $3,500 (RCW 6.15.010 (1)(a)).
Photos and Keepsakes
All family photos and keepsakes are exempt (RCW 6.25.010 (1)(a)).
Each individual is entitled to an exemption for a private library not to exceed $3,500 in value (RCW 6.15.010 (1)). Professionals such as a physician, surgeon, attorney, or clergyman, have an additional $10,000 exemption for the individual’s library, office furniture, office equipment and supplies (RCW 6.15.010 (1) (c)).
The community’s household goods, appliances, furniture, home and yard equipment, provisions, and fuel not to exceed $13,000 ($6,500 for an individual). No single item may exceed $750. (RCW 6.15.010 (3)(a)).
Other Personal Property
Other personal property, except personal earnings which are exempt in part under the garnishment statue (see below), not to exceed $3,000, of which not more than $1,500 may consist of cash, and of which not more than $500 may consist of bank accounts, savings and loan accounts, stocks, bonds, or other securities ($200 for state agencies until January 1, 2018). (RCW 6.15.010 (1)(c)(ii)).
For an individual, a motor vehicle used for personal transportation not to exceed $3,250 For a community, up to two cars with a total value of $6,500 (RCW 6.15.010 (1)(c)(iii)).
Child Support Received
Any past due, current, or future child support paid or owed to the debtor, which can be traced (RCW 6.15.010 (1)(c)(iv)).
All professionally prescribed health aids for the debtor or a dependent of the debtor (RCW 6.15.010 (1)(c)(iv)).
Personal Injury Awards
The individual debtors right to or proceeds of a payment not to exceed $20,000 on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or the right to or proceeds of a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor (RCW 6.15.010 (1)(c)(vi)). This exemption does not apply to the right of the state of Washington, or any agent or assignee of the state, as a lienholder or subrogee under RCW 43.20B.060.
The greater of 75 percent or 30 times the federal hourly minimum wage is exempt from garnishment from the employer (RCW 6.27.150). The statute does not cover execution or attachment or earnings in the hands of non-employers. Thus it is likely earnings that become property of the bankruptcy estate are not exempt. See Usery v. First National Bank of Arizona, 586 F.2d 107 (C.A.9, 1978). At least one court has held for the debtor: Money in debtors’ joint bank account which came from debtor husband’s labor as subcontractor constitutes earnings and character of money as earnings was not lost when money was placed into bank account; therefore, garnishment of funds to satisfy nondischargeable debt is limited to 25 percent pursuant to Colorado law providing that no more than 25 percent of aggregate of disposable earnings per week is subject to garnishment. In re Kobernusz, 160 B.R. 844 (D. Colo. 1993) (rejected by, In re Galvez, 115 Nev. 417, 990 P.2d 187 (1999)).
However RCW 6.32.250 provides: “This chapter does not authorize the seizure of, or other interference with the earnings of the judgment debtor for personal services to the extent they would be exempt against garnishment of the employer under RCW 6.27.150.” It is not clear what is meant by this provision since RCW 6.27.150 is in another chapter of RCW. There are no cases on the issue.
Employees are protected from discharge on account of a garnishment unless three or more separate indebtednesses are served upon the employer within any period of twelve consecutive months. (RCW 6.27.170)
Farmers, Professionals and Workers
The following exemptions apply to particular businesses: (a) To a farmer, farm trucks, farm stock, farm tools, farm equipment, supplies and seed, not to exceed $10,000 in value; (b) To a physician, surgeon, attorney, clergyman, or other professional person, the individual’s library, office furniture, office equipment and supplies, not to exceed $10,000 in value; (c) To any other individual, the tools and instruments and materials used to carry on his or her trade for the support of himself or herself or family, not to exceed $10,000 in value (RCW 6.15.010 (1(d)(i)).
Tuition units, under chapter 28B.95 RCW, purchased more than two years prior to the date of a bankruptcy filing or court judgment (RCW 6.15.010 (1)(e)).
Spendthrift trusts are set up to protect a debtor from himself. The debtor cannot take the principal but can only receive the specified income of the trust. The law has allowed creditors to invade the principal of spendthrift trust to recovery money spent for the necessary living expenses of the beneficiary. Washington law is very broad and seems to protect the principal of a trust for the benefit of the debtor whether or not it has spendthrift provisions. The only requirement is that the money come from a third person (RCW 6.32.250).