Filing for bankruptcy can feel overwhelming—especially when you're concerned about your most valuable asset: your home. At Tadross Law, we help Pennsylvania residents navigate this process with clarity and confidence. Whether you’re behind on mortgage payments or simply trying to protect your home from creditors, understanding how bankruptcy affects your property is essential.

Chapter 7 vs. Chapter 13 Bankruptcy

The two most common types of consumer bankruptcy are Chapter 7 and Chapter 13, and each affects your home differently:

• Chapter 7 Bankruptcy
  This form of bankruptcy involves liquidating assets to pay off debts. In Pennsylvania, you may be able to protect your home using exemptions, such as the federal homestead exemption or Pennsylvania’s wildcard exemption. If you are current on your mortgage and your equity is fully covered by the exemption, you may be able to keep your home. However, if you are behind on payments or have too much equity, the trustee could sell the home to repay creditors.

• Chapter 13 Bankruptcy
  Chapter 13 allows you to catch up on missed mortgage payments over a 3- to 5-year repayment plan. This option is often ideal for homeowners who want to keep their property and need time to become current on their loan. As long as you stay on track with your plan and continue to make mortgage payments, you can typically avoid foreclosure.

The Automatic Stay

When you file for bankruptcy, an automatic stay goes into effect, which temporarily stops foreclosure proceedings and collection efforts. This can provide much-needed breathing room while you work with your attorney on the next steps.

Equity and Exemptions in Pennsylvania

Pennsylvania does not offer a specific state homestead exemption, but filers can choose the federal exemptions instead. As of 2025, the federal homestead exemption allows you to protect up to $27,900 of equity in your home (or $55,800 for married couples filing jointly). Your attorney can help determine whether your equity is fully exempt and which exemption strategy is best.

What If I’m Facing Foreclosure?

If your home is in foreclosure, bankruptcy might still help. Filing under Chapter 13 can stop the foreclosure and allow you to catch up on your arrears. In Chapter 7, it may delay the process, giving you time to explore other options or plan your move.

At Tadross Law, we understand how stressful financial hardship can be—especially when your home is on the line. We help Pennsylvania residents explore bankruptcy options that make sense for their specific situation.