Does ‘Doubling’ Help when Filing for Bankruptcy in Pennsylvania

If you are having financial troubles and considering the idea of filing for bankruptcy, your biggest hesitation is likely about the possibility of losing your home. Though bankruptcy is often the best alternative for those who are struggling with debt, it is not a “get out of jail free” card – it has numerous downsides, including a negative impact on your credit score. Still, in many cases, people who pursue a bankruptcy filing learn that things are not quite as bad as they anticipated. Under existing bankruptcy laws, you are permitted to retain a certain amount of your assets, and If you are married there is a good chance that you can double the amount that you can keep. The assets you are allowed to keep under a Chapter 7 bankruptcy are called exemptions, and there is an extensive list of specific types of exempt property that are outlined in the bankruptcy code. Exemptions that people are usually unaware of may include up to a certain value on items such as a car or personal jewelry, and other items are allowed to be kept outright, such as tools for your trade. Under federal law, there is a bankruptcy homestead exemption of $23,675 worth of equity that you can keep in your home, and if the home is owned jointly by you and your spouse and you are filing for bankruptcy together, you can use doubling to protect up to $47,350 of your equity.

The rules on doubling are fairly straightforward in states where it is allowed. Pennsylvania does permit doubling, so as long as the two of you file a joint bankruptcy petition and the assets you are trying to protect are in both of your names, you have a much greater chance of being able to hold on to some of the things that are of value to you. Pennsylvania permits state residents who are filing for bankruptcy to choose whether they want to use the Pennsylvania bankruptcy exemptions or those that have been put in place by the federal government, but in most cases, it works to your favor to opt for the federal exemption laws. This is particularly true if you want to keep your car or your house, as the state does not provide an exemption either for motor vehicles or for the homestead. It is also important to note that though some states to permit those filing for bankruptcy to mix the state and federal exemptions that they choose so that their filing works to their best advantage, in Pennsylvania there is no ‘mix and match’ option – you have to choose either federal rules or the state’s rules.

Pennsylvania does permit doubling for married couples, so it is worthwhile if you live in the state to review and compare the federal and state options to be sure which will work best for you. If you’d like more information, contact us online to speak to one of our experienced bankruptcy attorneys at Erik B. Jensen Attorneys at Law.