Overview of Homestead Protection Laws
State homestead laws allows property owners to protect equity in their home by declaring a limited parcel of their domicile as a "homestead." Most states with such protections place limits on the acreage, square footage, or value of a property that may be declared a homestead in the event of a Chapter 7 or Chapter 13 bankruptcy filing. These laws allow homeowners to hold onto equity, up to a certain amount, if it's greater than the remaining balance on the mortgage.
Pennsylvania homestead law is very limited, allowing only a $300 exemption (applicable to any property, not just real estate) for property owned jointly by a married couple.
Homestead Protection Under Federal Bankruptcy Law
While the Pennsylvania exemption system does not provide for a robust homestead exemption, equity in your home may be protected if you opt to use the federal bankruptcy exemption scheme.
The federal bankruptcy homestead exemption amount is $22,975 (as of 2013). The exemption may be used for homes, condos, co-ops, mobile homes, and burial plots. Married couples may double this exemption to $45,950. Whether you may keep your home in a bankruptcy filing will depend on how much equity you have in the property and how much of that is exempt from creditors.
Also, federal law requires that you must live in the property for at least 40 months prior to the bankruptcy (any previous property owned in the state, as long as the proceeds were used to purchase the current property, count toward this requirement).
Learn more about Pennsylvania homestead laws in the chart below, followed by links to additional resources. See Can I Keep My Home After Filing Bankruptcy? for more details.
| Code Section | Tit. 42 §8123; Tit. 72 §4751-3 |
| Max. Property Value That May Be Designated 'Homestead' | $300 monetary exemption from judgment only; for senior citizens, a formula based on a sliding scale of income up to $15,000 |
| Maximum Acreage (Urban) | - |
| Maximum Acreage (Rural) | - |
Note: State laws are constantly changing -- contact an Pennsylvania bankruptcy attorney or conduct your own legal research to verify the state law(s) you are researching.
Pennsylvania Homestead Laws: Related Resources
