Bankruptcy
Legislative Changes to the Washington Homestead Statute May Benefit Washington Bankruptcy Filers
By passing “Engrossed Substitute Senate Bill 5408” during the recent legislative session, the Washington State Legislature significantly changed the Washington homestead statute. The bill is expected to be signed by Governor Inslee on Tuesday, May 18th of this year.
According to a post on the United States Bankruptcy Court website for the Western District of Washington, https://www.wawb.uscourts.gov/news/washington-state-legislature-significantly-amends-homestead-law-effective-may-18-2021, released on April 20th of this year,
In general, homestead law contained in bill Engrossed Substitute Senate Bill 5408 provides for increases in homestead exemptions based on “the county median sale price of a single-family home in the preceding year.”
“Homestead includes real or personal property a dependent of the owner uses as a residence. A dependent has the same meaning as in [the] federal bankruptcy code. A dependent of a homeowner is not required to sign off on any documents needed to transfer the property.”
A forced sale is defined to include any sale of the homestead property in a bankruptcy proceeding. The reinvestment provisions do not apply to the proceeds. This change to the homestead law adopts the court’s holding in the decision of In re Good [588 B.R. 573 (Bankr. W.D. Wash. 2018)].
The homestead exemption amount is the greater of $125,000 or the county median sale price of a single-family home in the preceding calendar year. A court shall accept data on the county median sale price of a single family home from the Washington Center for Real Estate Research, or if the Washington Center for Real Estate Research no longer provides the data, a successor entity designated by the Office of Financial Management. This data can be found on the Washington Center for Real Estate Research site under the “Annual Median Price” tab here: https://wcrer.be.uw.edu/archived-reports/.]
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