Washington BK Exemptions Question

[IOEveryone]

Within chapter7dot com (received notification I can't attach links yet - newbie!) I found a statement that "75 percent of your disposable income" is exempt. I'm confused. What relevance, other than determining your elgibility for filing for a Ch. 7, does your income play? In a Ch. 13 it would direct what your payments would be during the 3-5 year period, however, in a Ch. 7, what role does it play?

Thanks!

[tcreegan]

Hi IOEveryone,

Go here for a Washington specific list of exemptions: http://www.thebankruptcysite.org/exe...ashington.html

The exempt wages thing applies to any wages you earned before filing but haven't been paid by the day you file your BK

Say you are paid on the 1st of the month and file your BK on the 16th You have earned 16 days of pay that haven't been paid yet. The trustee would take all this money in the BK....except WA allows you to exempt (keep) 75% So you keep 12 days wages (75%) and give the trustee 4 days pay (25%)

Just to complicate things: In WA you get to chose to follow WA state rules or federal rules. In the federal rules, there is no exemption for wages. Using the example above, you would owe the trustee the whole 16 days wages. But the federal rules allow a "wildcard" exemption, you can use it for anything. If you have $1000 wildcard in the federal rules, you keep $1000 of your unpaid wages.

Of course the best thing to do is file the day after payday....sometimes the simplest answer is the best one!

Tom in Colo

[IOEveryone]

Thanks tcreegan. Great advice!

[ValleYum]

Hi IOE! We did as Tom said and filed the second day of the pay period.

Then we used the Federal Wildcard to cover it as we have no equity in our house to protect. If you are upside down in equity this wildcard is nice and allows you to keep a good amount of unearned wages, cash, anticipated tax refunds, etc. Our attorney was the one who told us that using the Federal exemptions were best in our particular case.

Shows us again that the advice of a good attorney is worth it's weight in gold.

Hope all goes great for you!!!

[tcreegan]

the advice of a good attorney is worth it's weight in gold.

...which means they can't be blowing a lot of hot air...doesn't weigh much..

sorry, couldn't resist..

[ValleYum]

the advice of a good attorney is worth it's weight in gold.

...which means they can't be blowing a lot of hot air...doesn't weigh much..

sorry, couldn't resist..

:::giggle::: You make me smile, Tom. A good thing! Thanks for being you!