Filing for Bankruptcy in Pennsylvania

December 6, 2017

Many people use bankruptcy to get back on track financially. The process involves setting forth your income, expenses, assets, debt, and property transactions on official bankruptcy forms. In this article, you’ll learn where to find information you'll need in your Pennsylvania bankruptcy case.

(Find out about bankruptcy options in What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?)

Official Bankruptcy Forms

Preparing your paperwork starts with gathering financial documents and transferring the information onto fillable, downloadable forms that you’ll find on the U.S. Bankruptcy Court forms website.

Your case will begin once you file the paperwork with the court clerk. Expect to pay a filing fee or submit a fee waiver request, and to file proof that you’ve completed the pre-bankruptcy education requirement (more below).

Pennsylvania Bankruptcy Information

Although bankruptcy is primarily governed by federal law, you’ll need some Pennsylvania law and other state-related information to prepare your filing.

Pennsylvania’s Bankruptcy Courts

Pennsylvania has three bankruptcy districts—the Eastern, Middle, and Western district. Each has several locations serving the surrounding areas.

You'll find the court’s address, phone number, and hours of operation on its webpage, as well as local forms and instructions for people filing without an attorney. (Click on the court’s name to go to the homepage.)

Pennsylvania Means Testing and Credit Counseling Information

You’ll likely need to go to the U.S. Trustee’s website for the following information:

• Means testing figures. In a Chapter 7 bankruptcy, you’ll have to establish that you’re qualified to file by taking the “means test.” “Means Testing Information” will appear in the left navbar on the U.S. Trustee’s website. You’ll use some of the same information if you plan to file for Chapter 13 bankruptcy.

• Education providers. Most filers must complete two education classes before receiving a discharge—one before filing and the other afterward. You’ll find approved providers by selecting “Credit Counseling & Debtor Education” from the left navbar on the U.S. Trustee’s site. Scroll down to your bankruptcy court.

Pennsylvania Bankruptcy Exemptions

Exemptions allow you to protect some or all of your property, such as homes, vehicles, and cash, when you file for bankruptcy. If you file under Chapter 7 bankruptcy, you’ll be allowed to keep things that are protected by Pennsylvania’s bankruptcy exemptions. If you file for Chapter 13 bankruptcy, you’ll pay the value of any nonexempt property to your creditors through your Chapter 13 plan.

Federal Exemptions Are Available in Pennsylvania

Pennsylvania has a set of state exemptions, but there’s different set of bankruptcy exemptions under federal law (called the federal bankruptcy exemptions). Pennsylvania allows you to choose either the federal or state bankruptcy exemptions, but you can’t mix and match between the two sets.

If you choose the Pennsylvania bankruptcy exemptions, you can also use any of the federal nonbankruptcy exemptions to protect property such as retirement and disability benefits for federal employees and military personnel.

Married Couples Can Double Pennsylvania Exemptions

Married couples filing together in Pennsylvania can double the exemption amount for any property that belongs to each of them (but not on property belonging to one spouse only).

Commonly-Used Pennsylvania Bankruptcy Exemptions

Here are some of the most commonly-used Pennsylvania bankruptcy exemptions. (References are to the Pennsylvania Consolidated Statutes (Pa.C.S.).)

Homestead

Pennsylvania doesn’t have a homestead exemption, but you might be able to protect your home equity if you and your spouse own it as a tenancy by the entirety, or if you use the federal bankruptcy exemption scheme.

Personal and Business Property and Wages

• Clothing, religious texts, school books, a sewing machine, and uniforms. (42-8124)
• Wages held by an employer. (42-8127)
• $300 of property or cash (wildcard exemption). (42-8123)
• Specific partnership property. (15-8341-8345)

• City employees. (42-8124, 53-881.115, 53-13431-13446 & 53-23561-23575.2)
• State employees. (42-8124 & 71-5953)
• County employees. (16-4716)
• Public school employees. (24-8533 & 42-8124)
• Private annuity, pension, or retirement benefits. (42-8124)
• Police officers. (42-8124 & 53-761-776)
• Municipal employees. (42-8124 & 53-881.11)

Insurance

$100 per month in insurance or annuity payments and life insurance or annuity proceeds (multiple conditions apply); group insurance policy or proceeds; accident or disability insurance proceeds; no-fault automobile insurance proceeds. (42-8124)

Public Benefits

• Crime victims' compensation (18-11.106)
• Veterans' benefits. (51-20012, 20048 & 20127)
• Korean conflict veterans' benefits. (51-20098)
• Workers' compensation and unemployment compensation. (42-8124)

Confirming the Pennsylvania Bankruptcy Exemptions

Some exemptions are subject to conditions. Also, other exemptions are available. You can find and verify the exemption law at the Pennsylvania General Assembly website or by visiting your local law library.

Talk to an Attorney

There’s more you’ll need to know before filing a Pennsylvania bankruptcy case. Because bankruptcy law can be complicated, it’s prudent to meet with a knowledgeable bankruptcy lawyer.