Pennsylvania Bankruptcy Exemptions: Federal vs State (And Why It Matters)
One of the most important decisions in a Pennsylvania bankruptcy case happens before you ever file: federal exemptions or state exemptions? Pennsylvania is one of about 19 states that lets you choose, and the choice can mean the difference between keeping your house and losing it.
Yes — Pennsylvania allows federal exemptions
Under 11 U.S.C. § 522(b), Pennsylvania has not opted out of the federal exemption scheme. You pick one full set; you cannot mix and match.
The federal set (2025 figures, adjusted every 3 years)
- Homestead: $31,575 per filer ($63,150 for a married couple filing jointly)
- Vehicle: $5,025
- Wildcard: $1,675 + up to $15,800 of unused homestead
- Household goods: $800 per item, $16,850 total
- Retirement accounts: Unlimited for ERISA-qualified plans; IRAs up to $1.5 million
The Pennsylvania state set
- Homestead: $0 (no state homestead exemption — a major reason most PA filers choose federal)
- Wildcard: $300
- Tenancy by the entireties: Property owned with a non-filing spouse can be fully protected against the filer's individual debts
- Most retirement accounts: Fully protected
- Workers'' comp, unemployment, life insurance proceeds: Protected
Which set should you choose?
Choose federal exemptions if you have meaningful equity in a home titled solely in your name, or if you need the federal wildcard to protect cash or a tax refund.
Choose Pennsylvania exemptions if you're married, you own your home as tenants by the entireties, and the debts are only in one spouse's name. The entireties protection can shield a fully-paid home worth hundreds of thousands of dollars.
Can you keep your home filing bankruptcy in Pennsylvania?
In most cases, yes. Between the federal homestead exemption, the entireties doctrine, and Chapter 13's ability to cure mortgage arrears, very few Pennsylvania filers lose their homes. The key is choosing the right chapter and the right exemption set before you file.