Pennsylvania Bankruptcy Exemptions: State vs. Federal (2026)

When you file bankruptcy, everything you own becomes part of the bankruptcy estate under 11 U.S.C. § 541, and exemptions are the laws that let you take property back out of the estate and keep it. Under 11 U.S.C. § 522(b)(2), each state may opt out of the federal exemption list and require its residents to use the state list instead. Pennsylvania did not opt out, so Pennsylvania filers get a real choice: the federal exemptions, or the Pennsylvania state exemptions plus the federal non-bankruptcy exemptions in § 522(b)(3).

Two rules shape the choice. First, under § 522(b)(1), you pick one system or the other — you cannot take the federal homestead and the state wage protection in the same case. Second, married couples filing jointly must both use the same system (§ 522(b)(1)).

There is also a domicile rule. You must have been domiciled in Pennsylvania for the 730 days before filing to use Pennsylvania's exemptions. If you were not domiciled in one state for that whole period, the state where you were domiciled for most of the 180 days before that 730-day window controls; if that leaves you ineligible for any exemptions, you may use the federal list (11 U.S.C. § 522(b)(3)).

These are the current federal figures under 11 U.S.C. § 522(d), as adjusted by the Judicial Conference effective April 1, 2025 (90 Fed. Reg. 8941). The amounts adjust every three years; the next adjustment is April 1, 2028. A married couple filing jointly doubles each per-filer amount.

• Homestead (home equity) — § 522(d)(1): $31,575
• Motor vehicle — § 522(d)(2): $5,025
• Household goods and furnishings — § 522(d)(3): $800 per item, $16,850 total
• Jewelry — § 522(d)(4): $2,125
• Wildcard (any property) — § 522(d)(5): $1,675 plus up to $15,800 of unused homestead
• Tools of the trade — § 522(d)(6): $3,175
• Unmatured life insurance contract — § 522(d)(7): no dollar cap
• Life insurance loan / cash value — § 522(d)(8): $16,850
• Health aids — § 522(d)(9): no dollar cap
• Social Security, unemployment, veterans and disability benefits — § 522(d)(10): Exempt
• Personal bodily injury payment (not including pain and suffering or compensation for actual financial loss) — § 522(d)(11)(D): $31,575
• Retirement accounts — § 522(d)(12): Exempt; IRAs and Roth IRAs capped at $1,711,975 under § 522(n) (rollovers excluded)

The wildcard is the workhorse for Pennsylvania filers. Because most renters and many homeowners have little or no home equity, the unused-homestead portion of the wildcard — up to $15,800 — can be pointed at anything: a second vehicle, a bank balance, a tax refund, business equipment.

Pennsylvania's own list is short. The general exemption under 42 Pa.C.S. § 8123 protects only $300 of any property — it has been $300 since 1982, and there is no Pennsylvania homestead exemption at all.

What the state side does offer:

• Tenancy by the entireties. Property a married couple holds jointly generally cannot be reached by a creditor of only one spouse. In bankruptcy this works through 11 U.S.C. § 522(b)(3)(B): when only one spouse files and the debts are individual, entireties property — often the marital home — can be fully protected regardless of equity.
• Tax-qualified retirement funds. Under § 522(b)(3)(C), retirement funds that are tax-exempt under the Internal Revenue Code (401(k), 403(b), pensions, IRAs) are protected whichever system you choose.
• Wage protection. Pennsylvania law exempts wages from attachment while they are in the hands of the employer (42 Pa.C.S. § 8127), with exceptions that include support, divorce-related orders, board for four weeks or less, certain residential-lease judgments, PHEAA student loans, and criminal restitution, fines and costs. In bankruptcy this protection is part of the state exemption system.
• Specific personal property. 42 Pa.C.S. § 8124 protects clothing, bibles, schoolbooks, and sewing machines belonging to seamstresses or owned and used by private families. The retirement exemption under § 8124(b)(1)(ix) does not cover amounts contributed within one year before filing, or contributions over $15,000 in a year.

For most Pennsylvania filers the federal set wins, simply because the federal wildcard and homestead figures are real money and the state general exemption is $300. The state system wins in one recurring situation: a married couple where only one spouse has the debt and the couple owns their home (or other major property) as tenants by the entireties. In that posture the state scheme can protect the entire home no matter how much equity there is, while the federal homestead exemption would cap protection at the per-filer figure.

This is a genuine fork in the road and it is fact-specific — how the deed is titled, whose name the debts are in, and whether both spouses need to file all matter. It is one of the first analyses I run for married clients.

In Chapter 7, a trustee can sell property that is not covered by an exemption and distribute the proceeds to creditors. In practice, most consumer Chapter 7 cases are no-asset cases — the exemption analysis is done before filing, and if something valuable would be exposed, that is a reason to look at Chapter 13 instead.

In Chapter 13, you keep non-exempt property, but your plan must pay unsecured creditors at least what they would have received if that property had been sold — the "best interests of creditors" test in 11 U.S.C. § 1325(a)(4). Non-exempt value raises the plan payment rather than costing you the property.

Exemptions protect your equity: the property's fair market value on the filing date (11 U.S.C. § 522(a)(2)) minus valid liens against it. Trustees sometimes also consider what a sale would actually net, so ask about your specific property. A home worth $280,000 with a $240,000 mortgage has roughly $40,000 of equity. A car worth $12,000 with a $9,000 loan has $3,000 of equity, which fits inside the federal vehicle exemption.

Valuation is where disputes happen. Trustees look at recent appraisals, comparable sales, and Kelley Blue Book or auction values for vehicles. We document value before filing so the exemption math is settled on our terms, not argued about afterward.

Primary sources for the figures and rules on this page:

• [11 U.S.C. § 522 — Exemptions (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/522)
• [11 U.S.C. § 541 — Property of the estate (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/541)
• [11 U.S.C. § 1325 — Confirmation of plan (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/1325)
• [Federal Register — Bankruptcy exemption dollar-amount adjustment notice](https://www.govinfo.gov/content/pkg/FR-2025-02-04/html/2025-02207.htm)
• [Official Bankruptcy Forms (uscourts.gov)](https://www.uscourts.gov/forms/bankruptcy-forms)
• [42 Pa.C.S. § 8123 — General exemption (Pennsylvania General Assembly)](https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=42&chpt=81&sctn=8123)
• [42 Pa.C.S. § 8124 — Specific property exemptions (Pennsylvania General Assembly)](https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=42&chpt=81&sctn=8124)
• [42 Pa.C.S. § 8127 — Wage attachment exemption (Pennsylvania General Assembly)](https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=42&chpt=81&sctn=8127)
• [U.S. Bankruptcy Court — Middle District of Pennsylvania](https://www.pamb.uscourts.gov/)