What are Pennsylvania-specific bankruptcy exemption laws?

On Behalf of | Aug 23, 2021 | Bankruptcy Law |

Many individuals encumbered with debt without any prospect of rising out of it pursue bankruptcy.

There are pros and cons for filing Chapter 7 versus 13 bankruptcy. Chapter 7 bankruptcy allows you to eliminate most if not all of your unsecured debts if you can prove that you can’t repay them. Chapter 13 requires you to devise a repayment plan for getting back on track in paying what you owe.

There are additional differences between Chapter 7 and 13 bankruptcies. These distinctions center around exemptions. Pennsylvania laws see exemptions differently depending on which bankruptcy you file.

How do Pennsylvania and federal laws treat exemptions?

Individuals filing Chapter 7 bankruptcy often opt to take state-specific exemptions, including ones for:

  • Current wages
  • Personal effects
  • Your business partnership’s property
  • Government benefits
  • Your retirement accounts

Pennsylvania law also allows you to take a wildcard exemption, which amounts to an ability to hold on to $300 worth of personal property of your choice not included in the above-referenced categories.

Debtors filing for most other bankruptcy types claim federal instead of state exemptions. These include ones for:

  • Motor vehicles, provided you have less than $4,000 in equity built into it.
  • Government-funded retirement accounts. Caps may limit how much you can have in IRA and 401(k) accounts.
  • Personal property, including furniture, electronics or jewelry, up to a certain monetary limit.
  • Any home equity over $25,150, with a few restrictions.


Included on the list of federal exemptions is also a wildcard one that allows you to exempt up to $1,325 in property. This wildcard exemption increases to $12,575 if you don’t take the federal homestead one.

Deciding which bankruptcy to file and what to keep

Understanding the intricacies of each type of bankruptcy and then determining which one is best for you to file takes educating yourself about these different options. You’ll want to weigh what your preferred end result is and which assets you’re looking to hold on to before making any definitive decision about whether to pursue Chapter 7 or 13 bankruptcy. Looking at the list of exempt assets may help you hone in what’s the best choice for you.


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