Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Pennsylvania. However, state law plays an important role, particularly in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Before you file for Chapter 7 or Chapter 13 bankruptcy in Pennsylvania, you will have to complete mandatory credit counseling with an agency that’s been approved by the United States Trustee’s Office. Here’s a list of agencies in Pennsylvania that have been approved to provide this counseling.
Where to File
In Pennsylvania, there are bankruptcy courts in three districts -- the Eastern, Middle, and Western. At the websites for each of these districts, you can find information on forms, local rules, and more.
Like every other state, Pennsylvania has its own set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
In Pennsylvania, you may use either the Pennsylvania state exemptions, or the federal bankruptcy exemptions.
Pennsylvania is one of the few states that does not have a homestead exemption. Pennsylvania's personal property exemptions include an unlimited amount for bibles, schoolbooks, military uniforms, and sewing machines. You may also exempt various public benefits, certain pensions, and earned but unpaid wages, among other things. Here’s a list of Pennsylvania exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Pennsylvania. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median Pennsylvania income for a one-person household is just over $45,000; these figures change periodically; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here a list of agencies approved to provide this course in Pennsylvania.
Getting Help From a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Pennsylvania bankruptcy lawyer.