In Pennsylvania, the best way to save your house in a bankruptcy, is to not include your spouse in the filing. However, if that’s not an option, because you share significant debts which you are attempting to discharge through a bankruptcy filing, you may consider reducing the equity in your home before filing. Because Pennsylvania does not have a homestead exemption, you would be limited by the federal bankruptcy homestead exemption if $40,400.
To reduce the amount of equity in your home, so that the bankruptcy trustee does not sell your home, you could:
- take a home equity loan
- sell part of your house
- do a reverse mortgage
Using the proceeds of these actions, you could then proceed to buy exempt property.
This is a very advanced bankruptcy technique. If this is something that you are considering, then you definitely should first consult with a bankruptcy lawyer first. In some cases, these actions might be considered as abuse by the courts, and result in your bankruptcy petition being dismissed.
