There are many contributing factors that are associated with financial troubles. Some common reasons include unmanageable debt, serious illness, divorce, home foreclosure, or losing one’s job.

In fact, the average credit card debt in Pennsylvania is a whopping $5,383 per person. In addition, foreclosure rates are also as staggering, one out of every 1,895 PA homes is currently in foreclosure.

If you can relate to the scenarios above, then you are probably struggling with other personal problems that come with being in debt. The fear of losing your car, house or your money can drain a person physically. You have probably even considered Declaring Bankruptcy .

If you are thinking “Is Bankruptcy Best For Me?” you are surprisingly not alone. Around a million people file bankruptcy each year in America. Bankruptcy is a device created by the US Government to help struggling Americans find relief from substantial debt. You may want to consider filing bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy gives people the freedom to resolve their debt while still working with lenders in a legal capacity. It is initiated by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by a person or by spouses jointly. When the bankruptcy is over, the filer will ‘exit’ with a fresh new start.

During a bankruptcy, a trustee is appointed to oversee the deatils of the case. His or her duties will vary and depend on whether the person has filed for Chapter 13 or Chapter 7 bankruptcy.

Did you know that Pennsylvania ranks #34 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 186 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

Individuals or couples in Pennsylvania, who claim bankruptcy, can choose to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. What is the difference? Look below for more information

Chapter 7

In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.

Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation

Chapter 13

A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. You will be allowed to keep your valuable assets over a 3- to 5-year time frame.

In order to determine which type of bankruptcy an individual can file, they will have to determine their ability to repay using the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

For those who do not qualify for a Chapter 7 filing, they will be able to file for Chapter 13, as described above.

What Are Bankruptcy Exemptions?

Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.


  • None, but tenancies by the entirety are exempt without limit as to debts of one spouse.

Personal Property

  • Clothing, bibles, school books, sewing machines, uniform, and accoutrements.


  • Earned but unpaid wages; abuse victims’ wages.


  • 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).  
  • IRAS and Roth IRAs to $1,283,025.
  • County employees.
  • Public school employees.
  • Private retirement benefits if plan states that proceeds cannot be used to pay creditors; exemption limited to deposits up to $15,000 per year if deposited at least 1 year before filing (limit doesn’t apply to rollovers from other exempt funds).
  • Police officers.
  • Municipal employees.
  • City employees.
  • State employees.

Public Benefits

  • Crime victims’ compensation.
  • Workers’ compensation and unemployment compensation.
  • Veterans’ benefits.
  • Korean conflict veterans’ benefits.


  • 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 other dependent relative; accident or disability insurance proceeds; no-fault automobile insurance proceeds.


  • Business partnership property.


  • $300 of any property.

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

Current laws do not require filers to hire an attorney to declare bankruptcy relief. People are allowed to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not for the faint of heart.

Filing Bankruptcy without an Attorney

A basic Chapter 7 filing that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that may not require an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

Generally speaking, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy lawyer is there to represent you and not the creditors.

An attorney is also keenly familiar with exemption laws. In addition, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in PA, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In Pennsylvania

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In Pennsylvania

Ronald Reagan Federal Building
228 Walnut Street
Harrisburg,PA 17108
Pennsylvania Middle Bankruptcy Court

Max Rosenn United States Courthouse
197 South Main Street
Wilkes Barre,PA 18701
Pennsylvania Middle Bankruptcy Court

USX Tower
600 Grant Street
Pittsburgh,PA 15219
Pennsylvania Western Bankruptcy Court

South Park Row
17 South Park Row
Erie,PA 16501
Pennsylvania Western Bankruptcy Court


Additional Pennsylvania Resources

Foreclosure Help Program

Disability SSDI Benefits