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your debts, but you might have to let the bankruptcy court liquidate (sell) some of
your property for the benefit of your creditors. ("Chapter 7" refers to the chapter
of the federal Bankruptcy Code that contains the bankruptcy law.)
If you properly file a Chapter 7, you will no longer have to repay your debts and
your debts will be “discharged”. A discharge in bankruptcy means that you no
longer personally owe the debts.
In a Chapter 7, you are allowed to keep a certain amount of property that is called
exempted property. The bankruptcy court and creditors cannot take “exempted”
property from you unless they have a lien or mortgage on it.
For 2009 in Pennsylvania, you were allowed to keep $3,225 equity in a car,
$10,775 in personal property, $20,200 in your home, a 1,075 wildcard exemption
plus another $10,100 wildcard exemptions if the home exemption isn’t used.
These amounts increase every year for cost of living. You also have an almost
unlimited exemption for retirement funds ($1,095,000.00). It is very important
to be aware that these figures are doubled for married joint filers.