Can bankruptcy take your home? Sometimes yes, but the homestead exemption is the rule that can protect some or all of the equity in the place you live when you file bankruptcy. In plain terms, it shields a certain amount of value in your primary residence from creditors and, in some cases, from a bankruptcy trustee who might otherwise sell the property to pay debts. The protection usually applies to a house, condo, mobile home, or even land used as your residence, but it does not cover every property you own.

What matters in real life is equity: the home's value minus mortgages and liens. If the equity fits within the exemption amount, keeping the home is more realistic. If it is higher, there may be risk unless other exemptions or planning options apply. In Washington, the homestead exemption is governed by the Washington Homestead Act, RCW 6.13, as amended in 2021. It generally protects the greater of $125,000 or the county median sale price for a single-family home in the prior calendar year.

For an injury claim, this can matter a lot. If someone is hurt on the job or in a crash, treated somewhere like Harborview Medical Center in Seattle, and then faces debt, settlement money used to buy or pay down a home may affect exempt equity. Before filing, get clear on title, home value, mortgages, and whether the property is truly your primary residence.