New laws aim to prevent people from losing their homes in Washington

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After the sale of Porter’s house as part of her bankruptcy case, she ended up leaving King County and settling in Walla Walla, where she now rents an apartment.

It’s a situation state lawmakers don’t want others to have to go through – especially as more and more people are expected to file for bankruptcy in the wake of the pandemic.

A new law aims to prevent people from losing their homes when they file for bankruptcy. Senate Bill 5408, which Gov. Jay Inslee enacted last week, increases the state homestead exemption so that it will no longer protect just $ 125,000 of the home’s value. ‘a person. Instead, the new law will protect a much larger amount – down to the county’s median selling price, based on homes sold the previous year.

Lawmakers have taken several other steps this year to keep people in their homes. These included putting more money into rent assistance; pass laws prohibiting landlords from evicting tenants without just cause; and requiring landlords to let tenants pay off rent using long-term payment plans, rather than having the debt owed all at once.

Together, lawmakers hope the bills will prevent more people from becoming homeless, especially after the state’s moratorium on evictions expires on June 30.

“This year’s budget provides more resources than ever related to housing stability and addressing homelessness, which in my opinion is very relevant during the pandemic,” the representative said. State Nicole Macri, D-Seattle, who frequently works on housing issues.

Homestead exemption

Porter, now 72, said she was doing quite well until about 15 years ago when she loaned money to her business partner and never got it back. When the 2008 recession hit, her credit card debt started to climb. It started a snowball effect in which she lost her home, business and retirement savings, she said.

“I was devastated – I was here, at 70, with all of my retirement and everything I’ve worked for my whole life, gone,” Porter said earlier this month.

If SB 5408 had been in effect when Porter filed for bankruptcy, she likely could have kept her home, she said.

Several people shared similar stories in public hearings. A man who lost his job during the pandemic said if the new law had been in place at the time, he could have avoided draining his retirement savings, which he said was the only way he could keep his house.

Others on the verge of bankruptcy said they could now keep their homes because the bill passed.

Lawyer Christina Henry said increasing the homestead exemption was a no-cost way for the legislature to help combat some of the economic effects of COVID-19. Henry sits on the board of directors of the Northwest Consumer Law Center, one of the main groups that have advocated for the new law.

“The purpose of the farm [exemption] is to place a family home out of the reach of the creditor, when individuals are facing financial hardship, so that their entire household and family does not suffer from homelessness, ”Henry told lawmakers at the meeting. ‘a public hearing in April.

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Tying the family property exemption to median house prices ensures that lawmakers don’t have to constantly come back and pass new law when house prices rise.

In King County, the median home price at the end of 2020 was $ 747,000. Statewide it was over $ 460,000 in the last quarter of last year.

Porter, the woman who lost her home in Issaquah, said that even though lawmakers have acted too late to help her, others will be able to stay at home due to the change in law.

“I’m glad it’s over,” Porter said. “I’m sure a lot of people have gone through the same thing.”

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