How Bankruptcy Exemptions work in Pennsylvania is important to you if you are considering a Chapter 7 or a Chapter 13 bankruptcy . If you have done your homework and are ready to move forward, it’s time to take a closer look at how this will impact your current situation.
One of the most important things you can do is learn is how bankruptcy exemptions work in Pennsylvania and what they can do for you. In short, you want to know what property you can protect in a bankruptcy case.
Bankruptcy law allows you to keep a certain amount of property after the filing of a Chapter 7 bankruptcy. This is known as exempt property. Conversely, there is also non-exempt property. This is property that is not protected, meaning a trustee could take it.
If someone does not have a house, or does not have equity in their home, he or she can protect up to $12,725 in personal property such as the property listed below for an individual. The amount doubles to $25,450.00 for a married couple.
Some of the most common types of non-exempt property include:
- Bank accounts, cash, bonds, and stocks
- Collections, such as stamps, sports memorabilia, and coins
- A second vehicle owned by the same person that has value.
- A vacation home or second home in which there is equity.
Like many, you may cringe at the thought of losing some or all of the above. However, this does not usually happen due to the exemptions and there are many types of exempt property, including:
- First vehicle
- Household appliances
- Household furnishings
- Compensation received from a personal injury lawsuit, subject to certain rules
- Portion of the equity in your home
Note: some property is only exempt up to a certain value.
It would be easy if you could file for Chapter 7 bankruptcy and still keep all your assets, but this is not the way the system works. For this reason, there are a lot of questions to answer. What do you do if you own property that is not exempt and you want to keep all your property? If you’ve already used up your bankruptcy exemptions, then you would consider filing under Chapter 13 to protect all your property, even non-exempt property.
There is nothing simple about bankruptcy law, especially when it comes to exemptions. If you are considering Chapter 7 or Chapter 13, contact us to simplify the bankruptcy process and learn more about the many ways this can help improve your financial life.