Many Washingtonians hit by financial catastrophe will have a greater chance to stay in their own homes under a bill signed into law yesterday.
“People should not lose their homes because of a crisis like the pandemic,” said Sen. Derek Stanford (D-Bothell), the bill’s sponsor. “This shock to the entire economy has put many people, including many small business owners, in danger of losing everything they’ve worked for, out of no fault of their own.
“Even though we expect that people’s homes are protected in bankruptcy, our state’s outdated laws meant that an average family home was actually not protected.”
Senate Bill 5408 raises Washington state’s homestead exemption, the rule that determines the value of a home that is protected in personal bankruptcy proceedings, to protect an average family home. The homestead exemption was set to a maximum of $125,000; Stanford’s bill raises the exemption to the median home price in the county, with a minimum of $125,000.
The bill, which passed both chambers of the Legislature with overwhelming bipartisan majorities, contains an emergency clause and took effect as soon as it was signed.