File Bankruptcy and Keep Your House, Car and Property

File Bankruptcy and Keep Your House, Car and Property

Many Philadelphians would like to file bankruptcy, but hesitate because they believe they will lose all of their assets and property. If this describes you, there is good news: bankruptcy exemptions allow you to protect many of your valuable belongings and possessions, while still enjoying the financial benefits of debt relief. Read on to hear Pennsylvania bankruptcy lawyers explain how the strategic use of exemptions may allow you to declare bankruptcy and keep your home, vehicle, and other property.

northeast philadelphia bankruptcy lawyer

Can I Keep My House and Vehicle if I File Bankruptcy?

As Philadelphia Chapter 7 lawyers, we are frequently contacted by Pennsylvanians who have questions such as, “Can I file for bankruptcy and keep my house?” or “Can I keep my car if I file bankruptcy?” Though it depends on the debtor’s financial circumstances, in many cases, the answer to both questions is yes.

The process of Chapter 7, which is also called “straight” or “ordinary” bankruptcy, involves liquidation of the debtor’s non-exempt assets by a court-appointed bankruptcy trustee. The idea is that proceeds from the sale will help pay the debtor’s creditors, since Chapter 7 creditors do not receive monthly payments as they would in a Chapter 13 bankruptcy.

However, the key here is the term “non-exempt.” If an asset is covered by bankruptcy exemptions, it is exempt and cannot be sold by the trustee.

If an asset is lost, generally it is surrendered because it does not make financial sense to keep it. For example, if a petitioner owns an automobile and has a loan for $15,000, but the car is only worth $5,000, the petitioner may voluntarily surrender the automobile and not be held responsible for the $10,000 deficiency.

But what if a debtor does not want to surrender property? In this type of situation, bankruptcy exemptions may provide financial protection.

Bankruptcy exemptions can be used to exempt property up to a certain dollar limit, which varies from exemption to exemption. Some examples of assets that may be exempted in Chapter 7 bankruptcy include:

  • Household Goods
  • Jewelry
  • Tools of a Trade

Pennsylvania debtors may choose between two sets of exemptions: the federal bankruptcy exemptions, or the Pennsylvania bankruptcy exemptions. Debtors must choose one or the other – not combine both systems. However, both sets of exemptions can have advantages as well as disadvantages, so it’s important to review your assets carefully with a Montgomery County Chapter 7 lawyer. Doing so will enable you to make an informed, practical decision about which exemptions will protect more of your property.

northwest philadelphia foreclosure attorney

Federal Bankruptcy Exemptions Chart 2016

The federal bankruptcy exemptions are listed below, along with:

  • The pertinent section of Title 11 of the United States Code.
  • A description of the type of exemption.
  • A brief explanation of rules associated with the exemption.

The following federal bankruptcy exemptions are current as of 2016, the most recent date of adjustment, but may be subject to change in the future.

U.S. Code SectionDescriptionUses
11 U.S. Code § 522(d)(1)Federal Homestead ExemptionReal property, including co-ops and mobile homes, or burial plots, up to $23,675. Unused portion of homestead, up to $11,850, can be used for other property.
11 U.S. Code § 522(d)(2)Personal Property (Motor Vehicle)Up to $3,775.
11 U.S. Code § 522(d)(3)Personal Property (Animals, etc.)Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $600 per item, and up to $12,625 total.
11 U.S. Code § 522(d)(4)Personal Property (Jewelry)Jewelry up to $1,600.
11 U.S. Code § 522(d)(9)Personal PropertyCovers health aids.
11 U.S. Code § 522(d)(11)(B)Wrongful Death CompensationCovers wrongful death recovery for the person you depended upon.
11 U.S. Code § 522(d)(11)(D)Personal Injury CompensationPersonal injury recovery up to $23,675 (except for pain and suffering or for pecuniary damages).
11 U.S. Code § 522(E)Compensation for Lost EarningsCovers payments to compensate for lost earnings.
11 U.S. Code § 522(b)(3)(C); 11 U.S. Code § 522(b)(3)(C)(n)PensionsTax exempt retirement accounts such as 401(k)s and 403(b)s; IRAs and Roth IRAs up to
$1,283,025.

So, how do the bankruptcy exemptions actually work? If a bankruptcy petitioner has equity in his or her vehicle, for example, the petitioner may combine the bankruptcy motor vehicle exemption and, if need be, the bankruptcy personal property exemption in order to protect the equity and retain the vehicle. Further, if a petitioner in bankruptcy has equity in their home, the petitioner may take advantage of the homestead exemption to ensure they will continue to enjoy the subject real estate.

On a final but crucial note, the federal exemptions can be doubled (called “doubling”) if a married couple files bankruptcy together (called filing “jointly”). In other words, you may be able to protect more of your property by filing bankruptcy with your husband or wife, as opposed to filing individually. For instance, the 2016 federal homestead exemption of $23,675 can be doubled to $47,350.

Contact Our Philadelphia Chapter 7 Lawyers About Home Foreclosure

Due to the federal exemptions, it is extremely rare that a petitioner in bankruptcy loses property when filing Chapter 7 with assistance from the Philadelphia foreclosure lawyers of Sadek & Cooper. If there are any questions or topics you would like to discuss relating to foreclosure or bankruptcy law in the Philadelphia, Pennsylvania region, contact the Delaware County Chapter 7 bankruptcy attorneys of Sadek & Cooper Law Offices at (215)-545-0008 today for a free legal consultation.

GET YOUR FREE CONSULTATION

superlawyers_badge

SEEWHAT OUR CLIENTS ARE SAYING

Kelly McKenna
Kelly McKenna
11:57 19 Apr 18
This form - specifically Yoninah Orenstein and Patrick Cooper are PHENOMENAL. They were great to work with, very fair with legal fees, and successful in getting an excellent settlement for my divorce (short term marriage
Dessiana Cruz
Dessiana Cruz
13:11 04 Apr 18
I was nervous about bankruptcy, but from the moment I stepped in your office I felt at ease. This process was so easy with your help, that yesterday I was talking to my coworkers about it and recommending your firm to them. You make something that’s scary seem easy and I thank you so much for helping me!
Valerie Nesbitt
Valerie Nesbitt
14:51 03 Apr 18
Sadek and Cooper have been excellent. Everyone has been extremely helpful and patient. The lawyers I have worked with, Matt and Brad, are extremely knowledgeable. I felt very comfortable with them handling my case.
Marlena Lucas
Marlena Lucas
16:08 02 Apr 18
Very simple. Any time I had questions, they were answered quickly. The lawyers are just great. Just a fast painless process.
James Smith Sr
James Smith Sr
13:19 14 Mar 18
Everything has been great. Really awesome job with my case... You and your staff have done a perfect job in my opinion.
Michkel Davis
Michkel Davis
17:02 09 Mar 18
Mr. Sadek was the best and most thorough lawyer I’ve ever met. He’s very human and caring about our case. His whole staff is great too. Highly recommend...
Tamika Richardson
Tamika Richardson
14:56 01 Mar 18
My bankruptcy went very smoothly with your firm. No issues. You are all very nice. That’s why I recommend my sister to your firm and your now helping her too! Thanks again.
Geraldine Ross
Geraldine Ross
14:14 28 Feb 18
This is an Excellent firm to work with; my questions were answered in a timely manner and I felt very supportive in handling my bankruptcy. I would highly recommend this firm to others who have found themselves in a position like mine.
Lavern Baker
Lavern Baker
17:03 23 Feb 18
You are all super lawyers. Brad and Matt made me feel comfortable. Every one in your office so nice and just made it easy. You’re the best!
peter b
peter b
19:42 21 Feb 18
Thank you, Sadek and Cooper Law offices for your dedication on my behalf. I appreciate Matthew and Patrick and your staff and all that everyone did to support me in this legal matter. You took an embarrassing, sad experience, for me, and turned it into a successful solution without all the emotional pain expected. After dealing with a loan modification company for over eighteen months without going to an attorney first that is the biggest mistake anyone can make. The Modification Companies set out to sell you lies, broken promises and dilute the homeowner's assets with no knowledge of any kind of law. I can't stress enough stay away from Modification companies, as a Military Veteran and family man, protect you or your family best interest. Go directly to Sadek and Copper you will not regret it! This firm moves with Super speed and diligence protecting you and your family's the entire process, even after watching some of these other attorneys in the courtroom appearing to mishandled their clients’ cases before the Trustee. You made it easy and I’m finally getting my financial life back on track! Thank you for your prompt replies to me, your clear information and preparation needed when at the courthouse. I would of course recommend you to others and I am glad you were the one who had my case. Kind genuine law firm who treats you like family. God bless you all and I pray for your continued success in your field of expertise. This firm is Super Lawyers for a reason. They are the best at what they do! Pete
Doug Tinlin
Doug Tinlin
06:55 15 Feb 18
Brad Sadek gave me hope when he decided to handle my mortgage for enclosure defense. I had exactly 10 days left of the 30 days ultimatum given me, but he was able to bargain for an extra 30 days for me to pay up. That duration turned out just right.
Jacinth Jacinth
Jacinth Jacinth
16:07 31 Jan 18
Excellent service. Brad and Matt were outstanding and friendly. They helped me through this. I’ve never met attorneys like these. Thank you!
julie njoku
julie njoku
12:29 24 Jan 18
Brad Sadek is excellent!. He understands and he's fair. You feel like you have someone fighting for you. The staff is friendly, professional, and courteous. These guys are the best at what they do !
Owen Black
Owen Black
20:14 09 Jan 18
Thanks for the great service! I would recommend this firm highly. Throughout the years I have been helped by this firm greatly and very much appreciated.
Steven Rychalsky
Steven Rychalsky
15:30 09 Jan 18
Sadek and Cooper law office was a wonderful experience to work with. Bankruptcy is a difficult experience but they helped with the stress so much and made it easy. I would recommend Sadek and copper too anyone.
Chris Kourelias
Chris Kourelias
19:09 28 Dec 17
Working with both Brad & Matthew was a pleasure. Both gentlemen are extremely knowledgeable and helpful in providing me the right assistance needed to make the correct decision to benefit me in the long run. I would recommend both candidates to anyone looking for assistance with a reputable law firm.
Jennyfer Santana
Jennyfer Santana
21:17 21 Dec 17
Highly Recommended. Matt & Brad assisted with my case. I felt comfortable throughout the entire process. Matt was very understanding, patient, and ensured he answered all my questions! Both great guys and very friendly! It was a pleasure working with Matt and Brad.
Next Reviews Write a review
Call Us Now