How to File for Pennsylvania Bankruptcy

Bankruptcy is a formal process that provides legal protection from creditors and gives you a financial fresh start. Although the bankruptcy proceedings occur in federal court, there are some state aspects to the process. This page will show you how to go about filing for bankruptcy in Pennsylvania.
Disclaimer

The content in this page is not a substitute for professional financial or legal advice. Please contact your financial adviser and attorney before using the information presented here.

How Bankruptcy Can Be a Financial Tool

A Pennsylvania bankruptcy attorney explains various scenarios here bankruptcy can actually improve an individual's ability to get credit in the future. After declaring bankruptcy, if you managing your finances responsibly, you will be better positioned to get credit than if you had continued to let the debts pile up with no way to repay them.

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Introduction

While bankruptcy is a distressing prospect, you can come out of it in a stronger financial position. Gather your information together, determine whether you qualify for Chapter 7 bankruptcy protection or not, and contact an attorney about filing your bankruptcy petition.
Step 1: Prepare for Pennsylvania Bankruptcy
In order to prepare to file for Pennsylvania bankruptcy, you'll want to make sure you have a detailed list of what you own and of what you owe.
1. Document your debts by listing the name, address, and phone number of each creditor, the balance due, interest rate, and minimum monthly payment. Place the list in a folder with a copy of the last statement you've received for each one as well as a copy of any correspondence you've received from your creditors.
2. Make a list all of your assets, with detailed descriptions, estimated values, and copies of any supporting documentation, like bank statements.
Step 2: Chapter 7 Pennsylvania Means Test

In order to use Chapter 7 bankruptcy in Pennsylvania, you need to show that your income is insufficient to pay your debts in a reasonable period of time. If your income is lower than the median income for a similarly sized family in Pennsylvania, you will satisfy this criteria. The median income for a single wage earner is $44,688; for a family of two, it is $53,011; for a family of three it is, $67,262; and for a family of four it is $78,780. (Numbers effectiveness for bankruptcies filed after March 15, 2009.)
Step 3: Pennsylvania Bankruptcy Exempt Assets

In Pennsylvania you can choose to take either the federal exemptions or Pennsylvania specific exemptions for assets. The decision can be complicated, and should be made with the help of an attorney.
Step 4: Debts Not Discharged by Bankruptcy
- Not all debts will be discharged or restructured by a bankruptcy settlement. The following types of debts are generally left intact after bankruptcy:
1. Alimony and child support payments
2. Taxes or Fines owed to federal or Pennsylvania government agencies
3. Student loans
4. Certain transactions made within 90 days of filing for bankruptcy, such as purchases of luxury items or cash advances
5. Debts accrued as a result of fraudulent or illegal activity
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