Pennsylvania Homestead Exemption
Almost every state provides protection for equity in the family home, and many states have increased the amount of protection in recent years. Seven states offer unlimited protection. Most states are not as generous.
New Federal Residency Requirement
Under the new bankruptcy law, you must be have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $160,375. (If your state's exemption offers less than this amount, the law is irrelevant to you.) The law is poorly worded but seems to say that if you move from one home to another in the same state, you can claim that state's homestead protection.
- PA Exemptions
- None; however, property held as tenancy by the entirety may be exempt against debts owed by only one spouse
In re Martin, 259 B.R. 119 (M.D. Pa. 2001)
- Real property, including co-op or mobile home, or burial plot to $25,150; unused portion of homestead to $12,575 may be applied to any property
11 U.S.C. § 522 (d)(1), (d)(5)
Home Valuation tool
Just add your street address to get an estimate of the value of your house, and all others in your neighborhood. (Note: Does not serve all areas, and valuations are imperfect estimates only.)
Tenancy by Entirety Exemption
Tenancy by the Entirety (TBE) is a form of property ownership, based on traditional English common law, that is still recognized in about 1/2 of states and the most common form of martial property ownership in many of them.
It protects property that is jointly owned by a married couple as an "entirety" -- which is to say, as a single marital entity, not as individuals.
Tenancy by the Entirety (TBE) was originally conceived as a debt shield -- a way of protecting wives and children from being left homeless and penniless as a result of the debts of a husband. Under the English common law TBE doctrine, a husband could not sell property owned by "the entirety", or give it away, or pledge it as security for a loan without the consent of his wife.
Today, 25 states still recognize some form of tenancy by the entirety, but they differ on the extent to which the property is exempt.
Special notes about Pennsylvania Tenancy by the Entirety Exemptions: Pennsylvania common law recognizes TBE and holds it exempt against debts owed by only spouse.
- Property held as tenancy by the entirety may be exempt against debts owed by only one spouse
In re Martin, 259 B.R. 119 (M.D. Pa. 2001)
Pennsylvania Insurance exemptions
Virtually all states protect life insurance proceeds in some manner or another. Some restrict it to proceeds paid to a dependent. Many states also protect the cash-value or loan-value of insurance policies.
If a substantial amount of your assets are in life insurance, you may want to consult a professional to determine the extent to which those policies are exempt.
- Accident or disability benefits
42 Pa. Cons. Stat. Ann. § 8124 (c)(7)
- Fraternal benefit society benefits
42 Pa. Cons. Stat. Ann. § 8124 (c)(1),(8)
- Group life policy or proceeds
42 Pa. Cons. Stat. Ann. § 8124 (c)(5)
- Insurance policy or annuity contract payments, where insured is the beneficiary, cash value or proceeds to $100 per month
42 Pa. Cons. Stat. Ann. § 8124 (c)(3)
- Life insurance and annuity proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors
42 Pa. Cons. Stat. Ann. § 8124 (c)(4)
- Life insurance annuity policy cash value or proceeds if beneficiary is insured's dependent, child or spouse
42 Pa. Cons. Stat. Ann. § 8124 (c)(6)
- No-fault automobile insurance proceeds
42 Pa. Cons. Stat. Ann. § 8124 (c)(9)
- Disability, illness, or unemployment benefits
11 U.S.C. § 522 (d)(10)(C)
- Life insurance payments from policy for person you depended on, needed for support
11 U.S.C. § 522 (d)(11)(C)
- Life insurance policy loan value, in accured dividends or interest, to $13,400
11 U.S.C. § 522 (d)(8)
- Unamtured life insurance contract, except credit insurance policy
11 U.S.C. § 522 (d)(7)
Miscellaneous other exemptions for Pennsylvania
- Property of business partnership
15 Pa. Cons. Stat. Ann. § 8342
- Alimony, child support needed for support
11 U.S.C. § 522 (d)(10)(D)
Pennsylvania Pensions & Retirement Savings Exemptions
The new federal bankruptcy law now automatically exempts a virtually all tax-exempt pensions and retirement savings accounts from bankruptcy, even if you are using state law exemptions. 11 U.S.C. § 522(b)(3)(C). (See Help Topic: Special Rules For Retirement Accounts.)
The law protects up to $1,283,025 of any pension or retirement fund that qualifies forspecial tax treatment under Internal Revenue Code sections 401,402, 403, 408, 408A, 414, 457, or 501(a).
- City employees
53 Pa. Cons. Stat. Ann. § 13445
53 Pa. Cons. Stat. Ann. § 23572
53 Pa. Cons. Stat. Ann. § 39383
42 Pa. Cons. Stat. Ann. § 8124 (b)(1)(iv)
- County employees
16 Pa. Cons. Stat. Ann. § 4716
- Municipal employees
53 Pa. Cons. Stat. Ann. § 881.115
42 Pa. Cons. Stat. Ann. § 8124 (b)(1)(vi)
- Police officers
53 Pa. Cons. Stat. Ann. § 764
53 Pa. Cons. Stat. Ann. § 776
53 Pa. Cons. Stat. Ann. § 23666
42 Pa. Cons. Stat. Ann. § 8124 (b)(1)(iii)
- Private retirement benefits (IRAs, etc.) to extent tax-deferred, if clause prohibits proceeds from being used to pay beneficiary's creditors; exemption limited to deposits of $15,000 per year made at least 1 year before filing (limit does not apply to rollovers from other exempt funds or accounts)
42 Pa. Cons. Stat. Ann. § 8124 (b)(1)(vii), (viii),(ix)
- Public school employees
24 Pa. Cons. Stat. Ann. § 8533
42 Pa. Cons. Stat. Ann. § 8124 (b)(1)(i)
- State employees
71 Pa. Cons. Stat. Ann. § 5953
42 Pa. Cons. Stat. Ann. § 8124 (b)(1)(ii)
Pennsylvania Personal Property Exemptions
This category covers your car, your non-retirement bank accounts, and most of your other personal possessions, other than your house.
States vary widely on how generous they are in this area. Some exemptions may be for any combination of property up to an aggregate amount. Other exemptions apply only to specific items, such as jewelry.
Remember that an exemption will not protect your car from being repossessed by the holder of the car loan you used to purchase the vehicle if you pledged the vehicle as security for the loan. To keep the car, you will have to pursue other options such as 'redemption' or 'reaffirmation.' See the help topics and How to File for Chapter 7 Bankruptcy for more on this.
- Animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments to $625 per item, $13,400 total
11 U.S.C. § 522 (d)(3)
- Health aids
11 U.S.C. § 522 (d)(9)
- Jewelry to $1,700
11 U.S.C. § 522 (d)(4)
- Lost earnings payments
11 U.S.C. § 522 (d)(11)(E)
- Motor vehicle to $4,000
11 U.S.C. § 522 (d)(2)
- Personal injury recoveries to $25,150 (not to include pain & suffering or pecuniary loss)
11 U.S.C. § 522 (d)(11)(D)
- Wrongful death recoveries for person you depended on
11 U.S.C. § 522 (d)(11)(B)
Auto Valuation Tools:
Both of these websites offer interactive tools to determine the current value of your used car.
Pennsylvania Public Benefits Exemptions
Most states exempt public benefits, consistent with the notion that such benefits are intended as a safety net for the recipient.
- Crime victims' compensation
18 Pa. Cons. Stat. Ann. § 11.708
- Korean conflict veterans' benefits
51 Pa. Cons. Stat. Ann. § 20098
- Unemployment compensation
43 Pa. Cons. Stat. Ann. § 863
42 Pa. Cons. Stat. Ann. § 8124 (a)(10)
- Veterans' benefits
51 Pa. Cons. Stat. Ann. § 20127
51 Pa. Cons. Stat. Ann. § 20098
51 Pa. Cons. Stat. Ann. § 20048
51 Pa. Cons. Stat. Ann. § 20012
- Workers' compensation
42 Pa. Cons. Stat. Ann. § 8124 (c)(2)
Pennsylvania Tools of Trade Exemptions
These are the things you use to make a living. An automobile or truck can be a tool of trade if you use it as such. Commuting to work doesn't count, but if driving is a necessary component of transacting your business, you can claim your vehicle is a tool of trade.
- Seamstress's sewing machine
42 Pa. Cons. Stat. Ann. § 8124 (a)(3)
- Implements, books, & tools of trade to $2,525
11 U.S.C. § 522 (d)(6)
Pennsylvania Wage Garnishment Laws
Most states have a wage garnishment law. In some states, wage garnishment laws can be used in bankruptcy as an exemption to protect income that you had coming due, but not yet received, as of the day you filed, for work you had already done -- so called "earned but unpaid wages".
In some states, the wage garnishment law protects not only wages owed to you, but also wages already in your possession and saved over time preferably holding it in a separate bank account. In other states wage garnishment laws do not protect wages once they are they are in your possession.
11 U.S.C. § 522 (d)
Pennsylvania Wild Card Exemption
Most, but not all, states allow a so-called "wild-card" exemption that can apply to any property. The wild card exemption can be of particular help if one or more of your other exemptions falls short of protecting your equity. You may split your wild card exemption amount over multiple items and stack it atop other exemptions as needed to protect exposed equity.
- $300 of any property, including cash, real property, securities, or proceeds from sale of exempt property
42 Pa. Cons. Stat. Ann. § 8123