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Experienced lawyers, driven to succeed on your behalf.


Experienced lawyers, driven to succeed on your behalf.

Harrisburg residents contemplating bankruptcy may feel a sense of relief at the idea of having their debts erased and making a fresh financial start. Despite this, there may be concerns about having to give up your property or lower your standard of living for several years.

Luckily, Chapter 7 bankruptcies allow for certain exemptions to be made. There are both federal exemptions and state exemptions, and Pennsylvania allows you to choose which type of exemptions to use. This is a benefit to bankruptcy in Pennsylvania, as you can examine your circumstances to see which set of exemptions works best for you.

Exemptions allow certain items of property to be excluded from the bankruptcy and set aside so that creditors cannot use them to pay off your debts. There is a maximum dollar amount for exemptions under both the federal and Pennsylvania exemptions.

Personal property items such as cars, furniture and clothes are exempt, so you will generally not have to worry about not having clothes to wear or a bed to sleep in. The personal property exemption is called a wildcard exemption, and Pennsylvania’s maximum exemption is $300.

What about my house?

Aside from basic necessities, losing your home is likely to be your other major concern. Unfortunately, Pennsylvania has no homestead exemption. This means that if you have equity in a home, you must use the federal bankruptcy exemptions instead of Pennsylvania’s.

Outside of your home and personal property, Pennsylvania has exemptions for wages, retirement accounts, insurance proceeds and public assistance, although the maximum exemption amounts are different than under the federal exemptions. It is important to note that Pennsylvania does not have a motor vehicle exemption, which means if you have a car, you risk losing it to creditors if you file for bankruptcy.

Everyone’s situation is different, and which set of exemptions is right for you depends on your unique circumstances. Having an experienced bankruptcy attorney is beneficial to help you decide on the best set of exemptions to allow you to move forward with peace of mind.