Bankruptcy Laws Pennsylvania
The U.S. bankruptcy code is uniform for all states. Among its regulations, however, are items based on state-specific data. The Chapter 7 means test, for example, measures the debtor's income by the median family income in their state. The federal bankruptcy code includes a list of property exemption from liquidation, but each state can also create its own list of exemption property and can supersede the federal exemptions. On top of these variations, each federal bankruptcy court has its own local rules that govern filing of petitions within its jurisdiction and the management of bankruptcy cases.
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Identification
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The U.S. Constitution, in article I, section 8, gives the federal government jurisdiction over bankruptcy. For this reason, bankruptcy proceedings are filed at U.S. Bankruptcy Court. Each state has at least one bankruptcy court, but Pennsylvania has three. The eastern district has locations in Philadelphia and Reading. The middle district has offices in Wilkes-Barre and Harrisburg. The western district has offices in Pittsburgh, Johnstown and Eerie (see Resources).
Means Test
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The Chapter 7 means test is based on the median annual income for that state based on the household size. These figures are published annually by the U.S. Census Bureau. In 2009, the median income for a single wage earner in Pennsylvania was $44,688; for a family of two, $53,011; for three, $67,262; and for four, $78,780. For each additional member of your household in excess of four, add $6,900. If the median income is more than your annualized monthly income (average monthly income for the previous three months multiplied by 12), then you qualify for Chapter 7 in Pennsylvania.
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Filing
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Each district in Pennsylvania has its own local rules (available through its website). It is essential to review these rules prior to filing bankruptcy. For example, in the western district, all filings must be made electronically. In the eastern district, an original bankruptcy petition, along with all statements, schedules and supporting documents, must be filed with three paper copies. The eastern district is somewhat generous and instructs the clerk to accept all filings, even those that are unsigned or unaccompanied with the appropriate fees, and to inform the petitioner in the deficiency in their documents. A petition can be filed by facsimile in emergency cases if the middle district first gives its consent.
Fees
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In all three of Pennsylvania's districts, a bankruptcy proceeding is dismissed if the filing fee or an installment thereof is not made by its due date. The petitioner can pay the fee within 10 days of the dismissal and file for a reinstatement of the case. In the middle district, the petitioner has up to seven days after the initial due date to make payment before the case is dismissed, and the clerk will notify the petitioner of the due date of their filing fees.
Exemptions
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Pennsylvania allows bankruptcy petitioners to use the federal exemptions. The state's exemptions do not allow for a homestead exemption. However, property of a business partnership, insurance benefits and cash value, and pensions can all be exempted to some degree. Clothing, bibles and school books, uniforms and accouterments, and sewing machines are all generally exempt personal property. In addition, the state exemptions include a $300 wild card for any property including cash, securities or the sale of exempt property.
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