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Bankruptcy and divorce in Pennsylvania: part two

Finances and divorce are tricky enough to navigate on their own. Dealing with bankruptcy during divorce can become even more challenging.

In the previous article, you learned about the different options for filing for bankruptcy during the stages of divorce. Now take a deeper look at how a joint or separate filing may affect the divorce process.

Bankruptcy type

Individuals may file for a Chapter 7 or Chapter 13 bankruptcy either separately or jointly. With a Chapter 13 bankruptcy, they get to keep all of their property, while a bankruptcy trustee of a Chapter 7 bankruptcy may utilize all nonexempt property to pay down debts. In this manner, bankruptcy exemptions may play a large part in deciding which type of bankruptcy is the best choice, whether filing jointly or separately.  


Choosing to file for bankruptcy together may be beneficial to some divorcing couples. As previously shared, those couples who have been together for a long time, or those who simply share a vast amount of property, filing jointly may help to decrease the impact of the bankruptcy and fees associated with the divorce. In the state of Pennsylvania, couples are able to double their exemptions. Therefore, where a single individual may be able to exempt over $20,000 of home equity, a couple is able to exempt more than $40,000. 


In a Chapter 7 bankruptcy, the courts may take any nonexempt community property. Thankfully, this does not include marital property that both spouses own, so the family home may be safe. However, other shared assets must contribute to the bankruptcy. Also, if a couple shares any debts, the party who is not filing for bankruptcy may become responsible for the repayment of the rest of the debt. On the other hand, with a Chapter 13 bankruptcy, the filing party continues to pay on the debt, and the other party is no longer liable for the debt once the bankruptcy process is complete.

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Joshua Z. Goldblum, Attorney at Law
Stonewood Office Campus
826 Bustleton Pike Suite 101B
Feasterville, PA 19053

Phone: 215-322-2745
Fax: 215-953-9973
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