Pennsylvania Bankruptcy Exemptions

You can protect property in a Pennsylvania bankruptcy using either Pennsylvania's bankruptcy exemptions or the federal exemptions.

Update January 31, 2019

You won’t lose all of your assets when filing for bankruptcy in Pennsylvania. However, Pennsylvania’s bankruptcy exemptions are some of the most limited in the country.

You’ll be able to protect some of the things you’ll need, such as clothing and a retirement account, but not much more. Your other choice—using the federal bankruptcy exemptions—could provide more protection.

Learn more about filing a Pennsylvania bankruptcy case.

Pennsylvania Exemptions v. Federal Bankruptcy Exemptions

Some states, including Pennsylvania, allow residents to choose between the state and federal bankruptcy exemptions. You can’t protect property by using exemptions from both lists—you must pick the system that will work best for you. If you elect to use Pennsylvania’s state exemptions, the federal nonbankruptcy exemptions will be available to you, too.

Common Pennsylvania Bankruptcy Exemptions

Here are some of the more common exemptions in Pennsylvania. When reviewing them, you’ll want to keep these things in mind:

  • Joint filing. Unless otherwise noted, when spouses file together in Pennsylvania, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
  • Legal citations. You’ll find each of the statutes in the Pennsylvania Code or the federal law.

Pennsylvania Homestead Exemption

None, but the equity in a residence held in tenancy by the entirety can’t be used to repay the debts of one spouse. Contact a local bankruptcy lawyer for information about your situation.

Pennsylvania Wildcard Exemption

42-8123 – Up to $300 of any personal property (not real estate) or cash of the filer’s choosing.

Other Pennsylvania Exemptions

Personal Property

42-8124 - Clothing, bibles, school books, sewing machine, uniforms.

Wages

42-8127 - Earned but unpaid wages; abuse victims' wages.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to maximum (amount changes).

16-4716 -County employees.

24-8533 & 42-8124 - Public school employees.

42-8124 - Private retirement benefits if plan states that proceeds cannot be used to pay creditors. Exemption limits apply.

53-764 & 53-776 & 53-23666 - Police officers.

42-8124 & 53-881.115 - Municipal employees.

53-13445 & 53-23572 & 53-39383 - City employees.

42-8124 & 71-5953 - State employees.

Public Benefits

18-11.708 - Crime victims' compensation.

42-8124 - Workers' compensation and unemployment compensation.

51-20012 - Veterans' benefits.

51-20098 - Korean conflict veterans' benefits.

Insurance

42-8124 - Fraternal benefit society benefits; 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 decedent's spouse, child, or another dependent relative; accident or disability insurance proceeds; no-fault automobile insurance proceeds.

Other

15-8342 - Business partnership property.

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a Pennsylvania Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Pennsylvania Exemptions

This list includes the majority of bankruptcy exemptions available in Pennsylvania, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Pennsylvania Consolidated Statutes or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

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