This section of PALawHelp.org has information and resources about Bankruptcy issues in Pennsylvania.
A Guide to Bankruptcy
Bankruptcy is a legal proceeding in which a person who cannot pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided for by federal law, and all bankruptcy cases are handled in federal court.
A person who files for bankruptcy may get most or all of their bills discharged (wiped out); get to keep most or all of their property which otherwise might have been lost to creditors (people to whom money is owed); and get extra time to pay bills if they have regular income.
The two usual kinds of bankruptcies for individuals are Chapter 7 (called straight bankruptcy) and Chapter 13.
Chapter 7 Bankruptcy
Under Chapter 7, you ask the court to discharge your debts. The basic idea in a Chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for giving up your property, except for exempt property which the law allows you to keep. In many cases, much or all of your property may be exempt. Property which is not exempt is sold and the money distributed to creditors.
Chapter 13 Bankruptcy
Under Chapter 13, you file a plan showing how you will pay off some of your past-due and current debts over an extended period, normally three to five years. After you complete the plan, the unpaid balance on certain debts may be wiped out. A Chapter 13 bankruptcy can allow you to keep valuable property (especially your home) which might otherwise be lost.
You should consider filing a Chapter 13 plan if you own your home and are in danger of losing it because of money problems; are behind in debt payments, but can catch up on the most important debts if given some time; and have regular income. (This can include government benefits such as social security or public assistance.)
Property in Bankruptcy
In bankruptcy you can keep all property which the law says is exempt from the claims of creditors. You can choose between your exemptions under Pennsylvania law or under federal law. The federal exemptions are better for most people. More information . . .
Your right to receive certain benefits such as social security, unemployment compensation, veterans benefits, public assistance, and pensions—regardless of the amount are usually considered to be exempt, allowing you to continue to receive the full amount of the benefits.
Secured Creditors. Some of your creditors may have a security interest in your home or personal property. This means that you gave the creditor a mortgage on your home or put your property up as collateral for a debt. If you don’t make your payments on the debt, the creditor may be able to take and sell the home or property. If you are behind in your payments, the court in a Chapter 13 bankruptcy can give you time to catch up. For some types of property, you can pay the creditor the amount that the property is worth rather than the full debt.
Debts in Bankruptcy
Bankruptcy will wipe out most of your unsecured debts, but there are certain debts that will not be wiped out under the law because they are excluded from being discharged under bankruptcy law. More Information . . .
The debts are wiped out at the end of the bankruptcy when the court grants a Discharge Order. The Discharge Order excuses you from paying all your debts, except those excluded from discharge. The Discharge Order also forbids creditors from doing anything to try to collect a debt that has been discharged. However, if someone has co-signed a loan with you and you file for bankruptcy, the co-signer may have to pay your debt.
The court can refuse to grant a discharge, but only in very limited cases if you have done something improper, such as trying to cheat a creditor by hiding your property, giving false information to the court, refusing to obey a court order, etc.
After Bankruptcy
A bankruptcy can appear on your credit record for 10 years. However, this may actually help you get credit since your old debts were eliminated, placing you in a better position to pay your current bills
After bankruptcy you can not be discriminated against by employers or govenment agencies because of the bankruptcy. Public utilities cannot refuse you service because of the bankruptcy but can require a deposit for future service. If you lost your driver's license solely because you couldn’t pay court-ordered civil damages caused in an accident, bankruptcy will allow you to get your license back. Continue reading . . .
Additional information on Bankruptcy Law and procedure, and other issues related to bankruptcy can be found listed below.
Click on a resource category listed below to see information related to that category.
A Guide to Bankruptcy
An overview of consumer bankruptcy law from the Pennsylvania Legal Aid Network.
Bankruptcy Basics
This handbook from the U.S. Courts provides basic information on different aspects of the federal bankruptcy laws. It also provides a basic explanation of the different chapters under which a bankruptcy case may be filed and answers some of the most commonly asked questions about the bankruptcy process.
Creditor Lawsuits Handbook
This Handbook from North Penn Legal Services is for people dealing with creditor lawsuits, including information on such suits and common defenses. Last Updated June 2, 2014
Frequently Asked Questions - Bankruptcy Resources.org
The American Bankruptcy Institute has created BankruptcyResources.org to help those in financial difficulty find out more about bankruptcy. It features a list of common questions and straightforward answers to the questions.
Upsolve
If you need to file Chapter 7 bankruptcy, you may be able to file your bankruptcy through Upsolve. Upsolve is a national non-profit that helps people file for Chapter 7 bankruptcy at no cost. Upsolve is an online program focused on assisting low-income Americans through Chapter 7 bankruptcy at no cost. Read about whether Chapter 7 bankruptcy is right for you!
U.S. Bankruptcy Forms - National
Find a national federal bankruptcy court form. National court forms can be used in all federal courts. Each federal court also maintains their own local court forms. Check the U.S. Bankruptcy Court website for your district to find Local Forms in use in that district. You can also use the Federal Court Finder at https://www.uscourts.gov/federal-court-finder/search to find a other federal courts and their local court forms.
Approved Credit Counseling Agencies for Pennsylvania
From U.S. Trustee Program. Credit counseling agencies listed on this Web page are nonprofit budget and credit counseling agencies approved to provide counseling that individuals must take before they are eligible to file for bankruptcy protection, 11 U.S.C. § 109(h). Many of the approved agencies listed on this Web site may also provide other counseling services to assist individuals not considering bankruptcy. The United States Trustee Program does not endorse or recommend any particular credit counseling agency or debtor education provider, or guarantee the quality of its counseling or instructional services.
Approved Credit Counseling Agencies - Full Listing (All States and Territories)
From the U.S. Trustee Program. Credit counseling agencies listed on this Web page are nonprofit budget and credit counseling agencies approved to provide counseling that individuals must take before they are eligible to file for bankruptcy protection, 11 U.S.C. § 109(h). This listing also includes credit counseling agencies that provide counseling services in languages other than English.
Bankruptcy Counseling Requirements
Information from Northwestern Legal Services providing an overview about the credit counseling and debtor education now required in Chapter 7 and Chapter 13 Bankruptcy.
Federal Court Finder
Find a federal court location by location or court name, including appellate, district, bankruptcy, probation and pretrial office, or federal defender organization. Each District Court has its own local forms which are generally available on the Court website.
Upsolve
If you need to file Chapter 7 bankruptcy, you may be able to file your bankruptcy through Upsolve. Upsolve is a national non-profit that helps people file for Chapter 7 bankruptcy at no cost. Upsolve is an online program focused on assisting low-income Americans through Chapter 7 bankruptcy at no cost. Read about whether Chapter 7 bankruptcy is right for you!
U.S. Bankruptcy Forms - National
Find a national federal bankruptcy court form. National court forms can be used in all federal courts. Each federal court also maintains their own local court forms. Check the U.S. Bankruptcy Court website for your district to find Local Forms in use in that district. You can also use the Federal Court Finder at https://www.uscourts.gov/federal-court-finder/search to find a other federal courts and their local court forms.
A Guide to Bankruptcy
An overview of consumer bankruptcy law from the Pennsylvania Legal Aid Network.
Bankruptcy Counseling Requirements
Information from Northwestern Legal Services providing an overview about the credit counseling and debtor education now required in Chapter 7 and Chapter 13 Bankruptcy.
Bankruptcy: What it Really Means : North Penn Legal Services Bankruptcy Clinic Video
This video from North Penn Legal Services features a question and answer session from a Bankruptcy Clinic held by North Penn Legal Services addressing issues relating to bankruptcy proceedings and the effects of bankruptcy on various types of debts. (41:01) (July 2021)
Creditor Lawsuits Handbook
This Handbook from North Penn Legal Services is for people dealing with creditor lawsuits, including information on such suits and common defenses. Last Updated June 2, 2014
Business Entity Bankruptcy
General information from the Erie County Bar Association about bankruptcy issues for a business entity. (May 2023)
Personal Bankruptcy
Information from the Erie County Bar Association on bankruptcy for individuals and families. (August 2018)
Approved Credit Counseling Agencies for Pennsylvania
From U.S. Trustee Program. Credit counseling agencies listed on this Web page are nonprofit budget and credit counseling agencies approved to provide counseling that individuals must take before they are eligible to file for bankruptcy protection, 11 U.S.C. § 109(h). Many of the approved agencies listed on this Web site may also provide other counseling services to assist individuals not considering bankruptcy. The United States Trustee Program does not endorse or recommend any particular credit counseling agency or debtor education provider, or guarantee the quality of its counseling or instructional services.
Approved Credit Counseling Agencies - Full Listing (All States and Territories)
From the U.S. Trustee Program. Credit counseling agencies listed on this Web page are nonprofit budget and credit counseling agencies approved to provide counseling that individuals must take before they are eligible to file for bankruptcy protection, 11 U.S.C. § 109(h). This listing also includes credit counseling agencies that provide counseling services in languages other than English.
Bankruptcy Basics
This handbook from the U.S. Courts provides basic information on different aspects of the federal bankruptcy laws. It also provides a basic explanation of the different chapters under which a bankruptcy case may be filed and answers some of the most commonly asked questions about the bankruptcy process.
Bankruptcy Basics (Video)
Nine-part video presentation from the U.S. Courts providing an overview of the basic bankruptcy process. Developed from the Federal Judiciary publication "Bankruptcy Basics."
Filing for Bankruptcy Without an Attorney
Information from the U.S. Courts for individuals who are thinking about filing for bankruptcy without the assistance of an attorney. Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes. Pro se litigants are expected to follow the rules and procedures in federal courts and should be familiar with the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the local rules of the court in which the case is filed.
The Discharge in Bankruptcy
This information from the U.S. Courts' "Bankruptcy Basics" attempts to answer some basic questions about the discharge available to individual debtors. A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts.
U.S. Bankruptcy Forms - National
Find a national federal bankruptcy court form. National court forms can be used in all federal courts. Each federal court also maintains their own local court forms. Check the U.S. Bankruptcy Court website for your district to find Local Forms in use in that district. You can also use the Federal Court Finder at https://www.uscourts.gov/federal-court-finder/search to find a other federal courts and their local court forms.
Frequently Asked Questions - Bankruptcy Resources.org
The American Bankruptcy Institute has created BankruptcyResources.org to help those in financial difficulty find out more about bankruptcy. It features a list of common questions and straightforward answers to the questions.
Upsolve
If you need to file Chapter 7 bankruptcy, you may be able to file your bankruptcy through Upsolve. Upsolve is a national non-profit that helps people file for Chapter 7 bankruptcy at no cost. Upsolve is an online program focused on assisting low-income Americans through Chapter 7 bankruptcy at no cost. Read about whether Chapter 7 bankruptcy is right for you!