Bankruptcy is a legal way to get out from under debt you cannot pay. It is federal law, handled in federal court, and it works the same way in every state, with a few choices that Pennsylvania law gives you. Kevin Burke Law represents people in Northwestern Pennsylvania in both Chapter 7 and Chapter 13 cases. Consultations for debt relief issues are free.

Two kinds of bankruptcy for individuals

Chapter 7 wipes out most unsecured debts, such as credit cards, medical bills and personal loans, in a few months. It is for people whose income is too low to pay what they owe. A trustee can sell property that is not protected by an exemption and pay the money to creditors, but the exemptions are generous enough that in most Chapter 7 cases there is nothing to sell. Chapter 7 does not take away a house or car you are still paying for as long as you keep the payments current and the property is protected by an exemption.

Chapter 13 is a repayment plan. You pay what you can afford to a trustee every month for three to five years, and at the end most of the remaining unsecured debt is wiped out. Chapter 13 is the tool for people who are behind on a mortgage or a car loan and want to keep the property, because the plan lets you catch up on the missed payments over time. It is also used by people whose income is too high for Chapter 7 or who have property they would lose in Chapter 7.

As of 2026, Chapter 13 is available if your unsecured debts are under $526,700 and your secured debts are under $1,580,125.

The protection starts the day you file

Filing a bankruptcy case puts an “automatic stay” in place. With limited exceptions, creditors must stop collecting: no lawsuits, no foreclosure sale, no repossession, no bank account levy, no collection calls or letters. The stay stays in place while the case is open.

Who qualifies for Chapter 7: the means test

If your household income is below the Pennsylvania median for a household your size, you qualify for Chapter 7 on income. For cases filed on or after July 15, 2026, the Pennsylvania medians are:

• 1 person: $72,230 a year
• 2 people: $87,534
• 3 people: $110,151
• 4 people: $135,862
• Add $11,100 for each additional person

If your income is above the median, a second calculation looks at your income over the past six months and your allowed expenses. Some people above the median still qualify, and those who do not can usually file Chapter 13 instead.

What you keep: exemptions

Exemptions are the lists of property that bankruptcy cannot touch. Pennsylvania lets you choose between the federal list and the Pennsylvania list, and almost everyone in Pennsylvania chooses the federal list because the state list is small (its general exemption is $300). The federal exemption amounts in effect from April 1, 2025 through March 31, 2028 include:

• $31,575 of equity in your home
• $5,025 of equity in one vehicle
• $16,850 in household goods, furniture, clothing and appliances, with an $800 limit per item
• $2,125 in jewelry
• $3,175 in tools of your trade
• A “wildcard” of $1,675, plus up to $15,800 of any unused home exemption, that can protect anything, including cash in the bank or a tax refund

A married couple filing together can each claim a full set of exemptions. Retirement accounts such as 401(k)s and IRAs are protected separately. If only one spouse owes the debts, property that a married couple owns together as husband and wife (called tenancy by the entireties) is protected from that spouse’s creditors under Pennsylvania law, which can matter when choosing between the two lists.

What bankruptcy does not erase

Some debts survive a bankruptcy. The most common are:

• Child support, spousal support and alimony
• Most student loans
• Most recent income taxes and other certain tax claims
• Criminal fines, penalties and restitution
• Debts for injuries caused by drunk driving
• Debts for fraud or willful injury, if a creditor proves it
• Debts you leave off your paperwork

A mortgage or car loan survives too if you want to keep the property. Bankruptcy erases your personal obligation on the loan, but the lender keeps its lien, so you keep paying if you keep the house or car.

The steps in a bankruptcy case

1. Credit counseling. Within 180 days before filing, you must complete a short credit counseling course from an agency approved by the U.S. Trustee Program. It can be done online or by phone.
2. The paperwork. Your petition lists everything you own, everything you owe, your income and expenses, and your recent financial history. You will need your pay stubs for the 60 days before filing and your most recent federal tax return, which go to the trustee.
3. Filing. The case is filed in the U.S. Bankruptcy Court for the Western District of Pennsylvania. The court has an office in Erie at 17 South Park Row. The court’s fee is $338 for Chapter 7 and $313 for Chapter 13, and either fee can be paid in installments.
4. The meeting of creditors. Between 21 and 40 days after filing, the trustee holds a short meeting, called the 341 meeting, where you answer questions under oath about your paperwork. Creditors rarely attend. In the Western District of Pennsylvania these meetings have been held by Zoom video since February 2024, so you do not have to travel.
5. The debtor education course. Before a discharge can be entered, you complete a second short course on managing money.
6. Discharge. In Chapter 7 the court usually enters the discharge about four months after the case is filed. In Chapter 13 the discharge comes when the plan is finished, three to five years after filing.

In Chapter 13, your first plan payment to the trustee is due within 30 days after the case is filed, before the court has even approved the plan.

How bankruptcy affects your credit

A bankruptcy can stay on your credit report for up to 10 years. Many people find that their credit was already damaged by the missed payments and collection accounts that led them to file, and that it begins to recover once the debts are gone. You can file a Chapter 7 case only once every eight years.

How our office helps

• There is no charge for the initial consultation. We go over your debts, your income and your property, and tell you which chapter fits your situation, or whether a solution outside bankruptcy is better.
• We tell you before anything is filed what you will be able to keep.
• We prepare and file the petition, schedules and, in Chapter 13, the repayment plan, and we handle the trustee’s questions and requests for documents.
• We attend the meeting of creditors with you.
• We file emergency cases to stop a sheriff’s sale, a repossession, a wage attachment or a bank levy when time is short.
• We handle the motions that come up in a case: avoiding judgment liens on your home, reaffirming or surrendering a car loan, redeeming property, defending objections to your discharge, and responding to creditors who ask the court to lift the stay.
• We represent individuals in Chapter 7 and Chapter 13 cases.
• Outside of bankruptcy, we negotiate with creditors, settle debts, and defend collection lawsuits. See our Credit Card Defense page.
• Attorney Burke personally represents you through the end of your case.

We serve Crawford, Elk, Erie, Forest, Lawrence, McKean, Mercer, Potter, Venango and Warren counties.

Common Questions

Should I file Chapter 7 or Chapter 13?
It depends on your income, what you own, and what you are trying to protect. Chapter 7 is faster and wipes out unsecured debt in about four months, but it is only available if your income passes the means test and only protects property covered by the exemptions. Chapter 13 takes three to five years but lets you catch up on a mortgage or car loan and keep property that Chapter 7 would not protect. We go over both with you at the free consultation.

Will I lose my house or my car?
Usually not. In Chapter 7 you keep a house or car if your equity fits inside the exemption and you keep making the payments. In Chapter 13 you keep them by paying the missed payments through the plan. In 2026 the federal exemptions protect $31,575 of equity in a home and $5,025 in a vehicle, and a couple filing together can double those amounts.

Does bankruptcy stop foreclosure, repossession and collection calls?
Yes. The automatic stay takes effect the moment the case is filed and stops foreclosure sales, repossessions, lawsuits, bank levies, and collection calls and letters. If a sheriff’s sale or a repossession is coming up, the timing of the filing matters, so call as soon as you know about it.

Which debts cannot be wiped out?
Support and alimony, most student loans, recent taxes, criminal fines and restitution, debts from drunk-driving injuries, and debts you leave off your paperwork. Secured loans survive if you keep the property.

Do I have to go to court?
Almost never. The one required appearance is the Meeting of Creditors with the Trustee, which in the Western District of Pennsylvania is held by Zoom video. A judge is not present, and creditors rarely attend.

What does it cost to file?
The court’s filing fee is $338 for Chapter 7 and $313 for Chapter 13 as of 2026, plus the two required counseling courses, which are inexpensive. Our fees are explained at the free consultation.

What if I earn too much for Chapter 7?
The means test compares your household income with the Pennsylvania median, which for cases filed on or after July 15, 2026 is $72,230 for one person and $87,534 for two. Being above the median does not end the question; the test then looks at your allowed expenses. If Chapter 7 is not available, Chapter 13 almost always is.

Will I ever get credit again?
Yes. A bankruptcy can be reported for up to 10 years, but most people’s credit was already hurt before they filed, and it begins to rebuild once the debts are discharged.

What happens to a co-signer?
A Chapter 7 discharge protects you, not the co-signer, so the creditor can still collect from them. In Chapter 13, a co-signer on a consumer debt is protected while your plan pays the debt.

Can you help me without filing bankruptcy?
Yes. Many people need a defense to a collection lawsuit, a negotiated settlement with one or two creditors, or a letter that stops a collector’s calls, rather than a bankruptcy. The free consultation looks at every option, and bankruptcy is only one of them.

Can my spouse and I file together?
Yes. A married couple can file one case and each claim a full set of exemptions. One spouse can also file alone. Which is better depends on whose name the debts are in and how property is owned.

Call for a free consultation

Call 814-807-0972 or use the contact form. Consultations for debt relief issues are free.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

This page is general information as of 2026, not legal advice about your situation. The federal exemption amounts and debt limits are adjusted every three years, and the income figures for the means test change several times a year.