PA Bankruptcy Law
Bankruptcy laws were put in place by the US Constitution to help those who can no longer pay their bills and are drowning in debt. Although the Uniform Bankruptcy Code is set by Congress, each state has its own adaptation, specifically regarding exemptions.
You are reading this article because you are a resident of Pennsylvania considering bankruptcy as a solution to your financial strife. We will discuss PA bankruptcy law as it pertains to exemptions. The exemptions are pertinent to filing Chapter 7 bankruptcy. In order to file Chapter 7 you must pass a means test.
Part one of the means test weighs your disposable income against your total debt. This is a tool to determine your eligibility for filing Chapter 7 bankruptcy. If you do not pass the test, Chapter 13 is another option. Disposable income is what is left after deducting IRS approved expenses and the exemptions allowed by your particular state. PA bankruptcy law provides for the following exemptions: $300.00 for property; one hundred percent earned wages, retirement funds, social security and workers comp benefits, pensions, insurance proceeds and veterans’ benefits; one hundred percent clothing, bibles and books and sewing machines. The state of Pennsylvania carries no homestead provisions.
Given the above limitations regarding the PA bankruptcy law, if you have an income you may want to consider filing bankruptcy under Chapter 13. This will allow you to keep your property, including your home and vehicles. If you have disposable income you can work with the courts to devise a repayment plan with your creditors over the course of three to five years. Outstanding debt, if any, will be discharged at the end of the repayment plan provided you have met the terms and made all required payments.
All who file bankruptcy must have attended a ninety minute credit counseling course within 180 days before filing a petition. Additionally, no debts will be discharged through Chapter 7 or Chapter 13 without completing a debt information course. These are federal requirements regardless of the state in which you reside.
PA bankruptcy law is not as forgiving as in other states. Do your best to make ends meet. Contact your creditors to see if they will negotiate lower interest rates and monthly payments. If you still find yourself forced into bankruptcy, consult a bankruptcy attorney before making your decision. Many offer free consultations.