Thompson Law Group, P.C.

Can I file for Chapter 7 bankruptcy and keep certain properties?

Pennsylvanians who are facing significant debt and have no reasonable way to get out of it might consider methods to get into a better financial situation. For many, personal bankruptcy is not something they are willing to think about because of the stigma they believe is attached to it. Along with the misconceptions about the process, they also think that they will lose everything including their motor vehicle and home. However, with Chapter 7 bankruptcy, the reality is that you can keep your home and keep your motor vehicle provided the criteria for the filing is met.

Although Chapter 7 is called a "liquidation" bankruptcy, that is something of a misnomer and is easily misunderstood by those who are overwhelmed in their current situation. Certain properties are protected from liquidation. There is a homestead exemption. Pennsylvania itself does not have a homestead exemption, but the debtor can use the federal law to protect homes with equity up to $22,975 for an individual and $45,950 for a couple. These numbers sometimes change. The person must also have resided in the property for at least 40 months.

With motor vehicles, the federal exemption is $3,225. With that, the person can retain an automobile that falls under that in value. For personal property, people can keep a certain amount of their home furnishings, appliances, jewelry, and clothes. Of course, there are limits and people are advised not to go on a spending spree with credit cards just before they think they are going to file for bankruptcy.

For people who are facing financial problems and see no light at the end of the tunnel, Chapter 7 bankruptcy is a viable and perfectly legal alternative to get on better financial footing. Discussing a possible case and considering the options can be achieved by speaking to a legal professional experienced with helping clients who are considering filing for Chapter 7.

Source:, "Bankruptcy Exemptions: Chapter 7," accessed on Oct. 4, 2017

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