Federal law governs the filing of all bankruptcy cases. However, many states, including Pennsylvania, have specific local rules that pertain to state residents. To properly file a case in Pennsylvania, you'll have to locate the correct court, pay the proper fees, and use the appropriate exemptions. You'll also have to use local income data to determine if you pass the bankruptcy means test.
Pennsylvania is divided into three judicial districts: the Western, Middle and Eastern Districts. The Western District has locations in Pittsburgh, Erie and Johnstown. The Middle District has courts in Wilkes-Barre, Harrisburg and Williamsport, while the Eastern District is located in Philadelphia and Reading. You should file either in the district where you maintain your home, or where you have been living for the greater part of the prior 180 days.
The means test is one of the most important parts of any bankruptcy filing as it determines if your income is low enough to qualify for Chapter 7 bankruptcy. If your income is above the Pennsylvania median for a family of your size, you may have to file Chapter 13 instead. Under Chapter 13, you have to pay back some of what you owe over a three- to five-year period. Most debtors prefer Chapter 7 instead, which only lasts a few months and typically doesn't require repayment of any debt.
Improper calculation on the means test could prove costly. If you overstate your income, you may kick yourself out of qualifying for Chapter 7; if you understate your income, the trustee might dismiss your case. Consult an attorney to make sure your filing is accurate.
As of May 2015, the median income for a single filer in Pennsylvania
While you don't have to pay back your creditors when you file Chapter 7, you may lose some of your assets. Bankruptcy exemptions tell you what property you get to keep in Chapter 7. Assets you can't exempt may be taken by the bankruptcy trustee and sold, with the proceeds distributed among your creditors. In Pennsylvania, the courts let debtors choose between state or federal exemptions. You should compare the two systems to determine which best protects the assets in your case.
If you want to protect a home in Pennsylvania, you might want to choose the federal exemptions, since Pennsylvania does not allow for any homestead exemption at all under the state system. This is one of the quirks of the Pennsylvania state system, as other states, such as Florida, offer unlimited protection for homes.
Chapter 13 doesn't require the liquidation of any assets, but exemptions still play an important role. Under Chapter 13, exemptions are used to help determine how much you have to pay back to creditors, since the law states that you must pay back at least as much as you would have lost if you had filed Chapter 7.
Exemptions are among the most important parts of a bankruptcy petition. Pay careful attention to the law to ensure you protect as much property as possible. Consider consulting an attorney.
Fees & Additional Requirements
Before you file for bankruptcy in Pennsylvania, you'll have to complete a credit counseling course. To get your discharge, you'll also need to take a financial management course after you file. The cost for both courses must be "reasonable," typically around $50 or less.
When you submit your petition, you'll have to pay bankruptcy fees. As of June 2014, the fee to file Chapter 7 is $335, while Chapter 13 costs $310. If you can't afford the bankruptcy fees, you can apply to pay the fee in installments or ask for an outright waiver. If you apply for a waiver, you'll have to appear before a judge to determine if you qualify.