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Is Bankruptcy Different In Different States?

  • By: Christopher Benson
  • Published: October 21, 2014

Bankruptcy is a federal law—that means bankruptcy operates the same in all 50 states. So why is it that we hear about states that are more or less favorable for filing bankruptcy?

Everything regarding how all forms of bankruptcy operate is the same in all 50 states. The procedure is the same, the means test, counseling requirements, look back periods, and the amount of time a bankruptcy stays on your credit report is the same in all 50 states. There are even federal exemptions—that is, property that is considered exempt from liquidation in bankruptcy.

Fundamentally, bankruptcy operates the same everywhere. What is different from state to state, however, are the exemptions. What property you can keep during bankruptcy and what can be liquidated. Each state comes up with it’s own list, follows the federal exemptions, or allows residents to choose between a state or federal system, such as Washington State does. These exceptions were a big motivator for those seeking to protect large assets in bankruptcy. 

This law was passed in 2005 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act, which strengthened bankruptcy requirements to make it harder to discharge debt and prevent use of the bankruptcy system for fraudulent purposes.

Over the past 23 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.

Christopher Benson

About the Author Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More