how much are we allowed in chapter 7 bankruptcy
Chapter 7 Bankruptcy Attorney
This answer assumes that you have been a Pennsylvania resident for more than two years. Pennsylvania allows its residents to claim federal exemptions in bankruptcy. Federal exemptions allow $20,200.00 PER DEBTOR on "real ... property that the debtor uses as a residence..." so if you both file, then you can protect $40,400 of equity... looks like you would be ok, but please follow up with a bankruptcy attorney in your area to be sure. The best way to find a good bankruptcy attorney is to find one through www.nacba.org. Good luck!
If you elect to use the federal exemption set, the two of you can exempt a combined $40,400.00 ($20,200.00 each) on the equity of your residence.
If you elect to use the state exemption set, you can exempt the entire equity of residence, if you have no joint unsecured debts (i.e., the debts are just in your name or your spouse's name). The state exemption set is would be useful if the equity in your residence was larger than $40,400.00 (which it is not here).
Your choice of one set over the other will depend on the nature of your other assets and the extent of the equity in those assets.
Please link to my web site and blog to learn more about bankruptcy laws in Wilkes-Barre and in Pennsylvania.
I would agree with Mr. Harris. The federal exemptions probably apply. Usually, the trustee will allow a little wiggle room above the exemption for "costs of sale". I would suggest that you have a professional appraisal done if you appraisal is more than 6 months old.