Pennsylvania’s Wildcard Exemption: What It Is and How To Use It
Many people burdened with debt without any prospect of getting out of it pursue bankruptcy. Statistics estimate that in the year ending June 2025, over 540,000 bankruptcies were filed in the U.S. Most of these cases were filed by individuals. However, filing for bankruptcy can be really daunting. You may be concerned about losing your car or other personal property. Fortunately, exemptions exist that can help you protect some of your property from being used to pay creditors.
When you file for bankruptcy, you may either elect the federal exemptions or the state law exemptions where you reside. One of the most flexible protections available to Pennsylvania bankruptcy filers is the “wildcard exemption.” Below is what you need to know about how the wildcard exemption works and how you can use it to your advantage.
Understanding Bankruptcy Exemptions in Pennsylvania
When you file a Chapter 7 or Chapter 13 bankruptcy, the exemptions allowable help determine which assets you can protect from being liquidated or sold as part of the bankruptcy process. Exemptions exclude or exempt a certain amount owed from the bankruptcy process. Bankruptcy exemptions can include your home, vehicle, income, retirement savings, and personal property.
When you file for bankruptcy in Pennsylvania, you have the option of choosing between state exemptions and federal bankruptcy exemptions. You cannot utilize both. Each option comes with its own rules and dollar limits. Some people may prefer the state exemptions, whereas others may prefer the federal exemptions. It all comes down to your specific financial situation and the types of assets you wish to protect.
What Is the Wildcard Exemption?
In the U.S., the law allows bankruptcy filers to take a wildcard exemption. This exemption allows you to protect any property you choose. While other exemptions are limited to specific items like a home or a car, the wildcard exemption gives you the freedom to decide any asset to protect. You can apply a wildcard exemption to assets that do not have a specific exemption or combine it with another exemption to fully protect an asset, especially if the particular exemption’s value does not cover the full equity.
The Federal Wildcard Exemption
Under the federal exemption system, you can currently protect up to $1,675 in any property. Additionally, if you do not use all of your federal homestead exemption, you can add up to $15,800 of unused homestead exemption to your wildcard amount. This means that currently, you can protect up to $17,475 in property of your choosing under the federal wildcard exemption.
Pennsylvania’s State Wildcard Exemption
Pennsylvania’s law allows you to take a wildcard exemption and hold on to $300 worth of personal property of your choice. This can be in the form of cash, real property, or securities. Fortunately, if you wish to protect more valuable property, such as your vehicle, that may exceed the $300 limit, you are allowed to opt for the federal exemption system.
However, it is vital to note that while PA’s state exemption includes a small wildcard exemption, there are instances where the state’s exemption may be the better option. For example, Pennsylvania has a marital exemption whereby you can exempt marital property, such as your marital jointly titled residence, from beyond the reach of singular creditors (not joint debts). It is best to speak to a bankruptcy attorney for help understanding how each option applies to you and may benefit you.
It is also important to understand Pennsylvania’s state law exemptions if any creditors have obtained a judgment against you in state court. There may be state law exemptions you may claim to prevent a creditor from executing on a judgment against you. Creditors may also send you Interrogatories in Aid of Execution to you, which requires a prompt responses under the law. If you have received a Writ of Execution against you, it is important that you seek legal help right away. You may be able claim state law exemptions to prevent the execution/marshalling of your assets on a money judgment. However, failure to timely raise your state law exemptions may result in their waiver.
Contact Us for Legal Guidance
If you are considering bankruptcy or need help against a writ of execution being entered against you, contact our skilled Lehighton & Carbon County bankruptcy attorney Adam R. Weaver, Esq. for help understanding your options and ensuring you use every protection available under the law.
Source:
uscourts.gov/data-news/judiciary-news/2025/07/31/bankruptcy-filings-rise-115-percent-over-previous-year#:~:text=According%20to%20statistics%20released%20by,year%20ending%20June%2030%2C%202025.
