When filing for bankruptcy, individuals are allowed to keep some of their personal property so long as it remains under a determined value. Some of this personal property includes personal items like clothing, vehicles, and household items. For some professionals, they were permitted to keep tools and materials that are required for their specific type of work.
Effective July 23, 2023, the Fair Shot Act in Washington will be increasing exemptions for individuals filing for bankruptcy. This includes increased protection for personal property, property for married persons, essential property for business owners, and award damages for injured persons.
Married Persons are now Entitled to their Own Exemptions
Previously, when married persons filed for bankruptcy, all their personal property exemptions had to be pooled together. Under the new change, married persons are now each entitled to their own exemptions, doubling the amount of personal property that married couples will be allowed to exempt.
Personal Property Exemption Increase
The value of all other personal property not specifically mentioned has significantly increased. The maximum value was previously only $3,000, of which only $1,500 was permitted to consist of cash. The new update will now allow a maximum value of $10,000. The value of the personal property will be determined at the time the bankruptcy petition is filed.
Vehicle Exemption Increase
Vehicles were previously exempted if the value did not exceed $3,250 for one vehicle or $6,500 for two vehicles for a family unit. The Fair Shot Act will now allow for the exemption of vehicles that do not exceed the amount of $15,000 in aggregate value.
Unlimited Personal Injury Awards
For injured persons that have filed for bankruptcy, awards from suits and settlements were limited to only $20,000. The update will now allow for unlimited personal injury damages. The awards will be exempt from claims of creditors, except for claims that are for any liens or subrogation claims that arose out of the claims for personal injury or death.
All Business Owners now Permitted to Keep their Tools, Instruments, Materials, and Supplies to Continue to Work
Previously, only qualified individuals were permitted to keep tools, instruments, materials, and supplies for work related purposes. This only included farmers and professional individuals, such as doctors, attorneys, members of the clergy or any other professional person. The value of the materials was not to exceed $10,000. The update will now allow any individual to keep tools and supplies so long as it does not exceed the new maximum of $15,000.
The Fair Shot Act will be amending the current exemption laws in Washington. These changes will be extending some of the exemptions already provided to individuals filing for bankruptcy and overall affording additional protection.
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