Which Property Can Get Protected When You File for Bankruptcy?

When it comes to bankruptcy, it is generally about the management and reduction of your debts. But just when your creditors stop hounding you and you get some time during the automatic stay, you start thinking about what properties of yours can be protected by bankruptcy. So, take a look at what our Pittsburgh bankruptcy lawyer has to say about filing, liquidation, and foreclosure.

Exemption Claims in Bankruptcy

Exemptions include the items or assets that will be exempt from being sold off for repaying the creditors. Exemptions can vary from one case to another. You need to talk to an experienced Pittsburgh bankruptcy lawyer who can explain more easily how this system works.

In Pennsylvania, you have two options as a debtor:

  • Federal exemptions
  • State exemptions

Choosing the right exemption is important and for that, an experienced lawyer can help you.

Pennsylvania Bankruptcy Exemptions

If you are filing for bankruptcy in Pennsylvania, it can include the following:

  • Business properties owned by partners
  • Personal properties which can include the bible, academic books, sewing machines, military uniforms, or paraphernalia
  • Life insurance, no-fault auto insurance, disability benefits
  • Judgment from criminal cases in case you are a victim and getting paid by the offender
  • Pending wages and pensions
  • Private retirement benefits in which your package will have to say that it cannot be used for repaying the creditors
  • Unemployment benefits
  • Veteran benefits
  • Worker’s compensation
  • Wildcard that is limited to $300

In certain cases in Pennsylvania, as a bankruptcy filer, you can opt for both state and federal exemptions.

Federal Bankruptcy Exemptions

As you have already seen, the state exemptions in Pennsylvania don’t allow you to keep your home or car. And that is why you need to consider the federal exemptions.

The federal exemptions can include:

  • Personal properties, jewelry worth $1500, Motor vehicle worth $3675, Trade tools worth $2300, and miscellaneous $12,250
  • Domestic support including child support and alimony
  • Disability benefits
  • Homestead exemptions of $22,975
  • Life insurance of $12,250
  • Retirement accounts limited to $1,245,475
  • Veteran benefits
  • Unemployment benefits
  • Wildcards
Bankruptcy Filing, Trustee, and Foreclosure

When you are filing for bankruptcy, if you are going for Chapter 13, you don’t have to go for federal exemptions. You can get protection for your home and vehicle within the filing itself.

The main difference between chapter 7 and chapter 13 is the repayment plan. The Chapter 13 plan can span from three to five years. And depending on that the debtor needs to pay the creditor on time. The process of repayment is surely slow while compared to the speedy process of Chapter 7 bankruptcy. But these repayments will offer some protection to the liquidation of your assets.

While using federal exemptions, you can get $22,975 in home equity.

At the same time, when you are trying to delay a foreclosure, you can use bankruptcy as a safeguard from the liquidation of your assets. By filing the bankruptcy, you will get an automatic stay which will prevent your creditors from making any move to get their payments. The stay won’t halt the foreclosure permanently. But it can surely buy you some time that you can use to strengthen your finances.

If you are looking for more sound advice from our Pittsburgh bankruptcy lawyer, then come to us at Pittsburgh Bankruptcy Law Group. We will offer you a free consultation.

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