Chapter 7 Bankruptcy in Washington State: The Complete 2026 Guide

Chapter 7 Bankruptcy in Washington State: The Complete 2026 Guide

Authored and Reviewed by: Mark McClure, Managing Attorney at McClure Law Group

Admitted to the Washington State Bar (1994) & U.S. District Court for the Western District of Washington

In over 30 years of guiding clients through financial hardship in Kent and the greater Seattle area, the single most common myth I hear is that filing Chapter 7 means losing everything you own. Collection agencies ofte push this fear, telling people that credit cards or medical bills cannot be wid out. That is simply untrue.

Chapter 7 of the U.S. Bankruptcy Code (Title 11, U.S.C.) provides a legal framework to eliminate burdensome debt while protecting your essential assets.

How Chapter 7 Protects Your Assets

When you file a Chapter 7 petition in the U.S. Bankruptcy Court for the Western District of Washington, an "automatic stay" (11 U.S.C. § 362) takes effect immediately. Creditors are legally prohibited from calling you, sending demand letters, garnishing your wages, or repossessing your vehicle.

Washington is one of the few states where debtors can choose between two different exemption systems to protect their property: Federal Bankruptcy Exemptions or Washington State Exemptions. During your initial consultation, we analyze your financial footprint to select the option that saves you the most money.

2026 Federal vs. Washington State Exemption Breakdown

• Protecting Your Home (Homestead Exemption):

  Washington Exemptions (RCW 6.13.030): Your home equity is protected up to the median single-family home price in your county from the prior calendar year. For 2026 filings, this protects up to $940,000 in King County, $755,000 in Snohomish County, and $560,000 in Pierce County.

  • Federal Exemptions (11 U.S.C. § 522): Protects up to $31,575 per person ($63,150 for married couples).

• Protecting Cash & Bank Accounts:

  Washington Exemptions (RCW 6.15.010): Provides a $10,000 bank account/wildcard exemption for individuals filing bankruptcy.

  • Federal Exemptions: If you do not use the full federal homestead exemption, you can apply an unused wildcard exemption to protect up to $17,475 in cash per person ($34,950 for couples).

Debt Dischargeability Overview

• Dischargeable Debts (Wiped Out Entirely): Credit card balances, medical bills, personal loans, lines of credit, old lease terminations, repossessed vehicle deficiencies, and qualifying older tax debts.

• Non-Dischargeable Debts (11 U.S.C. § 523 Exceptions): Domestic support obligations (child support and alimony), most recent tax liabilities, court-ordered restitution, and most student loans (unless undue hardship is proven).

Court Fees & What to Expect

The U.S. Bankruptcy Court Western District of Washington requires a $338 statutory filing fee for Chapter 7 cases. Most Chapter 7 proceedings do not require court appearances in front of a judge; instead, you will attend a single 341 Meeting of Creditors accompanied by your McClure Law Group attorney.

About the Author: Mark McClure has practiced consumer bankruptcy, personal injury, and estate law in Washington since 1994. The McClure Law Group office is located in Kent, WA, serving clients across King and Pierce Counties. For a personalized case review, call our team at 253-631-6484.

Legal Disclaimer: This page provides general educational information under Washington law and Title 11 of the U.S. Code. It does not constitute formal legal advice or create an attorney-client relationship. Statutory limits and median home values adjust periodically.