How to File for Bankruptcy in PA: Means Test and Exemptions

To file for bankruptcy in Pennsylvania, you complete a pre-filing credit counseling course, decide between Chapter 7 and Chapter 13 based on the means test, and submit a petition with detailed financial schedules to one of the state’s three federal bankruptcy districts. From there, an automatic stay halts collection activity, you attend a short hearing with a court-appointed trustee, finish a second required education course, and receive a discharge that wipes out qualifying debts. Which property you keep depends on the exemption system you choose, and for most Pennsylvania filers the federal system protects more than the state’s.

Chapter 7 or Chapter 13

Chapter 7 eliminates most unsecured debts, including credit card balances, medical bills, and personal loans. A trustee reviews your assets, sells anything not protected by an exemption, and pays creditors from the proceeds. In practice, most Chapter 7 cases are “no-asset” cases where exemptions cover everything the filer owns. The case closes in about three to four months.

Chapter 13 restructures debt instead of erasing it. You propose a repayment plan that runs three to five years, funded by your regular income.1United States Courts. Chapter 13 – Bankruptcy Basics Filers below the means test threshold commit to a 36-month plan; those above it propose 60 months. Chapter 13 is usually the better choice if you’re behind on a mortgage or car loan and need to catch up over time, or if you own non-exempt property you’d lose in Chapter 7.

Passing the Means Test

Before you can file Chapter 7, you have to pass the means test. It compares your average monthly income over the six months before filing against the median income for a Pennsylvania household your size.2United States Department of Justice. Means Testing Come in below the median and you qualify without further analysis. Current Pennsylvania median income figures:

  • 1-person household: $70,378
  • 2-person household: $85,290
  • 3-person household: $107,327
  • 4-person household: $132,379
  • Each additional person: add $11,100

These figures are updated periodically, so confirm the numbers in effect when you file with the U.S. Trustee Program.3U.S. Trustee Program. Census Bureau Median Family Income By Family Size If your income exceeds the median, you’re not automatically shut out. You complete a longer calculation that subtracts allowed expenses from your income. If the disposable income remaining over 60 months falls below the threshold, Chapter 7 is still open. If not, you’re pushed to Chapter 13.

The Filing Process Step by Step

Complete Credit Counseling First

Every filer must finish a credit counseling course from an approved agency within 180 days before submitting the petition.4United States Trustee Program. Frequently Asked Questions – Credit Counseling Most agencies offer it online or by phone, it runs about an hour, and it typically costs around $20. Fee waivers are available for filers who can’t pay. Skip this step and the court dismisses your case.

Prepare the Petition and Schedules

The paperwork is extensive. Along with the petition itself, you file a set of standardized schedules that lay out your full financial picture:

  • Schedule A/B lists every asset you own, from real estate and vehicles to bank accounts, furniture, and clothing, at current value.
  • Schedule C identifies the exemptions you’re claiming to protect specific property.
  • Schedule D covers secured debts like mortgages and car loans.
  • Schedule E/F covers priority and unsecured debts, including taxes, credit cards, and medical bills.
  • Schedules I and J show current monthly income and expenses.
  • The Statement of Financial Affairs details income, property transfers, lawsuits, and financial transactions over the prior two years.

Everything is signed under penalty of perjury. Hiding assets or misstating income is grounds for dismissal and a federal crime. This is where pro se filers most often stumble. The forms look manageable but listing a car at trade-in value instead of replacement value, or forgetting a rarely-used bank account, can derail an otherwise clean case.

You’ll also need to give the trustee a copy of your most recent federal tax return, or a transcript, at least seven days before the 341 meeting.5Office of the Law Revision Counsel. 11 US Code 521 – Debtors Duties Chapter 13 filers must have all returns for the four years before filing actually on file with the IRS. If you’re behind, get them filed before you start the bankruptcy.

File in the Right District and Pay the Fee

Pennsylvania has three federal bankruptcy districts: Eastern (Philadelphia and surrounding counties), Middle (central Pennsylvania including Harrisburg and Scranton), and Western (Pittsburgh and western counties). File in the district where you’ve lived for the greater part of the last 180 days.

The Chapter 7 filing fee is $338. Chapter 13 is $313.6United States Courts. Bankruptcy Court Miscellaneous Fee Schedule You can request installments if you can’t pay upfront. Chapter 7 filers with household income under 150% of the federal poverty line can ask for a full fee waiver.7Office of the Law Revision Counsel. 28 US Code 1930 – Bankruptcy Fees There’s no fee waiver for Chapter 13.

The Automatic Stay Kicks In

The moment your petition hits the court’s system, the automatic stay takes effect. Creditors must stop all collection activity: no more phone calls, no lawsuits, no wage garnishments, no foreclosure sales. For many filers, this is the first real breathing room in months.

The stay has limits, though. It does not stop criminal proceedings, actions to establish or collect child support or alimony, paternity proceedings, or most tax audits and assessments.8Office of the Law Revision Counsel. 11 US Code 362 – Automatic Stay If your landlord already got an eviction judgment before you filed, the stay generally won’t save the tenancy. A creditor can also ask the court to lift the stay on specific property for cause.

Attend the 341 Meeting of Creditors

Between 21 and 60 days after filing, you attend a hearing called the 341 meeting of creditors. Despite the name, creditors rarely show up. The trustee runs the meeting, not a judge, and it usually lasts under ten minutes when your paperwork is solid.

You’ll be placed under oath and asked questions to verify your identity, confirm your schedules, and probe anything that looks unusual. Bring originals of two documents:

  • Photo ID: a valid driver’s license, government-issued ID, passport, military ID, or student ID.
  • Proof of Social Security number: your Social Security card, a W-2, a recent pay stub, or an IRS Form 1099.

Forgetting either one continues the meeting and delays everything.9United States Department of Justice. Proof of Identification and Social Security Number Required at Meeting of Creditors If something in your schedules doesn’t add up, the trustee may ask you to amend the filing or continue to a later date.

Finish the Debtor Education Course

After the 341 meeting, you complete a second mandatory course, this one on personal financial management. It’s separate from the pre-filing credit counseling. The certificate must be filed with the court before any discharge order can enter. Skip it and the court will close your case without a discharge, meaning you went through the whole process for nothing.

Receive the Discharge

In a Chapter 7 case, the discharge typically arrives about 60 days after the 341 meeting, assuming no objections are filed and the education certificate is in. The trustee’s work may continue longer if there are non-exempt assets to distribute, but the discharge itself usually isn’t held up by that. In Chapter 13, the discharge comes only after you complete every plan payment, three to five years later.1United States Courts. Chapter 13 – Bankruptcy Basics

Pennsylvania Bankruptcy Exemptions

Exemptions decide what you keep. Pennsylvania lets filers pick either the state or federal exemption system, but you can’t mix the two.

The State System

Pennsylvania’s state exemptions are thin. There’s no homestead exemption at all, meaning home equity gets zero dedicated protection under state law. The state wildcard covers just $300 of any property.10The General Assembly of Pennsylvania. Pennsylvania Code Title 42 – Judiciary and Judicial Procedure, Chapter 81 Beyond that, the state protects wearing apparel, bibles and school books, certain retirement funds (mainly public employee pensions and qualifying self-employment accounts), and some insurance benefits. For most filers those protections leave real gaps.

The Federal System

Federal exemptions are almost always the better choice in Pennsylvania. The federal homestead exemption protects up to $31,575 in home equity. The federal wildcard covers $1,675 in any property, plus up to $15,800 of any unused homestead exemption.11Office of the Law Revision Counsel. 11 US Code 522 – Exemptions That second piece is what makes the federal system so valuable for renters and filers with little home equity. If you don’t own a home, the wildcard jumps to $17,475, which can protect a car, a bank balance, and personal property together. These amounts were adjusted on April 1, 2025 and stay in effect through March 31, 2028.

Reaffirmation Agreements for Secured Property

In Chapter 7, you can keep property tied to a secured debt like a car loan by signing a reaffirmation agreement. That’s a new contract keeping you personally liable for the debt despite the discharge. You keep the car, but if you later default, the lender can repossess and pursue you for any deficiency just as if you’d never filed.

The agreement must be filed within 60 days after the first date set for your 341 meeting.12Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 4008 – Reaffirmation Agreement and Supporting Statement It has to include documentation showing you can afford the payments. If your income minus expenses comes in below the reaffirmed payment, the court presumes undue hardship and can refuse to approve it.13Office of the Law Revision Counsel. 11 US Code 524 – Effect of Discharge With an attorney certifying no undue hardship, the court generally approves without a hearing; without one, you need court approval at a hearing before discharge.

Think hard before reaffirming. Many filers reaffirm car loans out of fear of losing transportation and regret it when the payment becomes unmanageable a few months later.

Debts Bankruptcy Won’t Erase

Filing doesn’t clear every debt. Federal law carves out specific categories that survive both Chapter 7 and Chapter 13 discharges:14Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge

  • Child support and alimony. Domestic support obligations are entirely off the table.
  • Most recent income tax debt. To qualify for discharge, the return must have been due at least three years before filing, actually filed at least two years before filing, and assessed by the IRS at least 240 days before filing. Fraudulent returns and willful tax evasion never qualify.
  • Student loans, unless you can prove “undue hardship,” a standard most courts apply strictly.
  • Debts obtained through fraud or false statements.
  • Debts for death or personal injury caused by driving while intoxicated.
  • Criminal fines, penalties, and court-ordered restitution.
  • Debts from willful and malicious injury to another person or property.

One trap catches filers off guard: luxury purchases over $900 from a single creditor within 90 days of filing, and cash advances over $750 within 70 days, are presumed non-dischargeable. The court assumes you never intended to repay. If you’re planning to file, stop using credit cards well in advance.

What Happens to Your Credit and Job

A bankruptcy filing can stay on your credit report for up to ten years from the filing date.15Office of the Law Revision Counsel. 15 US Code 1681c – Requirements Relating to Information Contained in Consumer Reports In practice, the major credit bureaus remove completed Chapter 13 cases after seven years, though the statute allows ten. The score impact is heavy at first and softens with time, especially if you rebuild with responsible credit use after discharge.

Federal law also blocks certain forms of discrimination against people who’ve filed. Government agencies cannot deny you a license, permit, or government job solely because of a bankruptcy filing. Private employers cannot fire you or discriminate in employment for the same reason. Government and private lenders in student loan programs cannot deny loans or guarantees solely because of a prior bankruptcy.16Office of the Law Revision Counsel. 11 US Code 525 – Protection Against Discriminatory Treatment The word “solely” does the work in that statute. An employer can’t fire you just because you filed, but a private employer has no obligation to hire you in the first place, and courts have generally upheld that distinction.