If you file for Chapter 7 bankruptcy in Pennsylvania, you can protect some or all of your property with Pennsylvania’s bankruptcy exemptions. Pennsylvania’s bankruptcy exemptions also play a role in Chapter 13 bankruptcy. Continue reading to learn about what property is protected by Pennsylvania’s bankruptcy exemptions.
The Bankruptcy Exemptions in Pennsylvania
Exemptions allow you to protect certain property from your creditors, such as homes, vehicles, and cash. If you file for bankruptcy under Chapter 7, you will be allowed to keep those items that are protected by Pennsylvania’s bankruptcy exemptions. If you file bankruptcy under Chapter 13, Pennsylvania’s bankruptcy exemptions determine how much you pay to your creditors through your Chapter 13 plan.
Federal Exemptions Are Available in Pennsylvania
Pennsylvania has its own exemptions that you can use when you file for bankruptcy. There is also a different set of bankruptcy exemptions set forth by federal law (called the federal bankruptcy exemptions). Pennsylvania allows you to choose between the federal or state bankruptcy exemptions, but you must choose one or the other, meaning you may not mix and match from both sets of exemptions.
If you choose to use the Pennsylvania bankruptcy exemptions, you may also use any of the federal nonbankruptcy exemptions, which protect property such as retirement and disability benefits for federal employees and military personnel.
Married Couples May Double Pennsylvania Exemptions
Married couples filing a joint bankruptcy in Pennsylvania may double the exemption, meaning they can each claim the full exemption amount for any property that belongs to them. You may only claim an exemption for property that belongs to you, so you may not double an exemption if the property belongs only to your spouse, such as your spouse’s vehicle.
To learn more about the bankruptcy exemptions, such as how they work, which exemption system you are entitled to use, and special rules for the homestead exemption, see Nolo’s Bankruptcy Exemptions topic page.
Commonly Used Pennsylvania Bankruptcy Exemptions
Below are the most commonly used Pennsylvania bankruptcy exemptions. Unless otherwise indicated, all references are to the Pennsylvania Consolidated Statutes Annotated.
The Pennsylvania exemptions do not provide a homestead exemption, but equity in your home may be protected if you and your spouse own it as a tenancy by the entirety or if you opt to use the federal bankruptcy exemption scheme.
Clothing, bibles, school books, sewing machines, and uniforms - 42-8124
75% of wages - 2329.66(A)(13)(b)
City employees - 53-13445 & 53-23572 & 53-39383
State employees - 42-8124 & 71-5953
County employees - 16-4716
Public school employees - 24-8533 & 42-8124
Private retirement benefits (if plan states that proceeds cannot be used to pay creditors; up to $15,000 per year if deposited at least one year before filing; limit inapplicable to rollovers from other exempt funds) - 42-8124
Police officers - 53-764 & 53-776 & 53-23666
Municipal employees - 42-8124 & 53-881.115
Insurance or annuity payments up to $100 per month if insured is the beneficiary; annuity or life insurance proceeds if policy prohibits proceeds from being used to pay creditors; group insurance policy or proceeds; annuity or life insurance proceeds if beneficiary is the spouse, child, or other dependent relative of the decedent; accident or disability insurance proceeds; no-fault automobile insurance proceeds. 42-8124
Workers' compensation and unemployment compensation - 42-8124
Veterans' benefits - 51-20012
Crime victims' compensation - 18-11.708
Korean conflict veterans' benefits - 51-20098
$300 of any property - 42-8123
Business partnership property - 15-8342
Confirming the Pennsylvania Bankruptcy Exemptions
This list includes the more commonly used Pennsylvania exemptions, but there are other exemptions available to protect your property. You can verify the current exemption amounts at the website of the Pennsylvania General Assembly at www.legislature.state.oh.us/laws.cfm or by checking the statutes yourself. (To learn how to do this, see Nolo’s Legal Research Center.)