Pennsylvanians who are considering filing bankruptcy are often concerned about whether they will lose their property. In a Chapter 7 liquidation bankruptcy, debtors are likely to lose some of their possessions, which will be sold by the trustee to pay a portion of the owed debts. However, many categories of property are specifically exempted from inclusion in the bankruptcy estate, meaning they will not be sold and the debtor will be able to retain ownership.
A homestead exemption allows an individual or married couple filing for bankruptcy to protect some or their entire home. As of 2013, the federal government allows a homestead exemption of $22,975 for an individual and $45,950 for a married couple. In Pennsylvania, the homestead exemption is $300 for married couples who own property jointly. For senior citizens, there is a sliding scale in place that could result in an exemption of up to $15,000.