Pennsylvania bankruptcy laws

The bankruptcy laws in the state of Pennsylvania are determined by an act in 2005. The Pennsylvania bankruptcy laws are determined by your income and expenditure. It is a means tested law that analyses the previous 6 months income. If it is less than the state average for that period, you will be allowed to file a Chapter 7 bankruptcy. If the amount is above the average it is further means tested to decide if you can file under Chapter 7 or under Chapter 13.

Under the Pennsylvania bankruptcy laws if you cannot pay an amount of $6,000.00, or $100.00 a week back for a period of 5 years to unsecured creditors you are allowed to file under Chapter 7. If you are able to repay an amount more than $6000.00 but less than $10,000.00, a calculation is made to determine if you would win a Chapter 7 filing or if you need to file under chapter 13.

The Pennsylvania bankruptcy laws state that if you can afford to pay back to unsecured creditors more than $10,000.00 over 5 years you will have to file under Chapter 13. If you are able to pay back 25% of any unsecured debt, it is unlikely a Chapter 7 will be awarded to you.

More paper work is required if you wish to file a Chapter 13 bankruptcy as you need to include a payment schedule that outlines the repayments being made for the next 5 years. A court will decide whether to accept or deny your plan or payment.

As in most states, Pennsylvania bankruptcy laws allow some exemptions from filing. There is no exemption value of your house and place of residence. Insurance policies in the following categories are exempt, accident, fraternal benefits, and life insurance. Also exempt are some public benefits that your local bankruptcy attorney can inform you off. Personal property can be exempt if it falls into the following categories, Bibles, school books, uniforms, clothing but tools of your trade or business are not in the exemption categories.

As exemptions vary from state to state it is important to seek local advice.