People tend to view filing for bankruptcy as a reflection of poor financial decisions, but the truth is that medical debt is one of the top causes of relentless debt in the United States. No one is immune to illness or accident, and even families who think they have good health insurance can find themselves buried under bills after an unexpected surgery or emergency room visit. Rising deductibles, treatments that aren’t covered, and surprise charges often combine to create bills that are impossible to pay and trigger a cycle of late payments, damaged credit, and eventually lead to filing for bankruptcy.

Unlike other forms of debt, most medical bills aren’t optional. Families can’t avoid hospital stays, medications, or follow-up care. When cash flow and budgeting are disrupted by doctor and hospital bills, something has to give, and it’s often credit cards and other debts that feel less urgent. Medical providers are prone to turning unpaid balances over to collection agencies quickly, and the tactics used by these organizations add to the stress. While bankruptcy is a serious step, it sometimes is the only option for regaining your financial footing.

Still, before turning to bankruptcy, it’s a good idea to investigate other options. Hospitals and medical providers often offer financial assistance programs or charity care that can substantially reduce bills. Negotiating directly with billing departments or using a medical debt advocate can also lead to significant discounts or payment plans that feel more manageable and less disruptive to your budget. Nonprofit credit counseling services can help consolidate medical debt, and many states offer consumer protection programs designed to curb aggressive collection practices.

If your household is struggling with overwhelming medical debt and you see no path to repayment, bankruptcy can provide a fresh start. Under Chapter 7 bankruptcy, eligible debts—including medical bills—can often be discharged entirely, though some assets may need to be liquidated. Chapter 13 bankruptcy lets families keep their property and repay a portion of their debt through a structured court-approved plan that creates more attractive terms, and sometimes reduces the total owed. While bankruptcy can severely affect credit, it also stops collection calls and lawsuits, and sometimes that’s the best relief of all.

If your medical bills are impacting your financial well-being, start by gathering all your documentation and exploring the help that’s available to you. Speaking with an experienced bankruptcy attorney can clear up whether alternatives exist or if bankruptcy is the best path. For help, contact us today.

People facing debt and considering filing for bankruptcy know that doing so will provide significant relief and a clean slate, but they hesitate out of concerns about their 401(k) and IRA accounts. The good news is that both Pennsylvania and New Jersey offer strong protections for retirement savings, ensuring that your financial fresh start doesn’t come at the expense of your future security.

Under federal bankruptcy law, employer-sponsored retirement plans like 401(k)s, 403(b)s, and other pension plans that qualify under ERISA receive unlimited protection. They are completely exempt from creditors, regardless of what you owe, whether you file under Chapter 7 or Chapter 13 bankruptcy.

As of 2024, traditional and Roth IRAs receive federal protection up to $1,512,350 per person. Even with this cap, funds that are rolled over from employer plans to IRAs hold on to their unlimited protection. SEP-IRAs and SIMPLE IRAs receive the same protection as traditional IRAs.

Pennsylvania residents can choose between federal exemptions or state exemptions. Under Pennsylvania law, retirement benefits necessary for support are protected without dollar limits. This includes all federally qualified retirement plans and can be advantageous for those with IRA balances that go beyond the federal limits. These exemptions cover retirement accounts under Internal Revenue Code sections 401, 403, 408, 409, 414, 457, and 501(a). The state also protects reasonable retirement distributions needed for living expenses.

New Jersey offers similar protections, exempting retirement benefits necessary for the support of debtors and their dependents and doesn’t have specific dollar limits on retirement accounts. This has the potential to make state exemptions more favorable to the debtor for substantial retirement savings. New Jersey also provides teachers, police officers, and firefighters with enhanced protection for public employee retirement benefits.

Choosing between federal and state exemptions can be complicated and has long-term implications, so it’s a good idea to consult with an experienced bankruptcy attorney for assistance. These knowledgeable professionals will provide a careful analysis of your entire financial situation and help determine which exemption system offers the most protection for your specific situation.

During the COVID-19 pandemic, there was a significant downward trend in bankruptcy filings, but the numbers are on the rise in 2025.  There are many factors behind the shift, including higher interest rates, creeping inflation, and increased debt among consumers. If you’ve found yourself negatively affected by these or any other economic issues, filing for bankruptcy may be a necessary financial decision. Before you do so, it’s important to investigate the implications of bankruptcy on your spouse. If you’re married and live in Pennsylvania, the answer depends on several things, including the type of bankruptcy you file, how your debts are structured, and whether your spouse is a co-debtor.

The good news is that the state of Pennsylvania allows both individual and joint bankruptcy filings. If only one spouse files for bankruptcy, the other spouse is not automatically pulled into the case. Their individual assets and credit generally remain unaffected, as long as they’re not legally tied to your debts. However, any joint debts you share—like co-signed credit cards, loans, or mortgages—can still create bankruptcy liability for your spouse. Creditors can still pursue your spouse for payment on shared debts, especially if you qualify for and are filing a Chapter 7 bankruptcy, where there is no co-debtor protection.

Pennsylvania is not a community property state. This means that spouses don’t automatically share all the debts or assets acquired during marriage. Each person’s property and debts are typically considered their own, unless they’re jointly held. This is important because it can help protect a non-filing spouse’s assets. Still, careful analysis is needed to be sure about what’s exempt.

If your spouse isn’t a co-debtor with you, your bankruptcy filing will not appear on their credit report. But again, joint accounts may still be impacted. It may be harder for both of you to qualify for loans or credit if your bankruptcy filing lowers your combined financial profile.

Bankruptcy laws can be complex, and every situation is unique. If you’re considering filing for bankruptcy in Pennsylvania, contact our experienced bankruptcy attorneys to better understand how your filing may affect your spouse and your financial future.

One of the biggest concerns voiced by people considering bankruptcy is the fear that they’ll lose their most important assets. Most New Jersey residents filing for bankruptcy protection can hold onto their car and home: It just takes some strategic planning and a solid understanding of the exemptions that are available.

Every state has its own rules about bankruptcy. In New Jersey, debtors can choose between the exemptions that the state offers and the ones offered by the federal government. The New Jersey homestead exemption protects up to $23,675 of equity in your primary residence, while the federal exemption offers up to $27,900. If you’re a married couple filing jointly, you can double these amounts.

The state and the federal government also offer exemptions to protect your car; New Jersey allows up to $4,000 in car equity, while the national exemption is $4,500. Even if your car is worth more than the exemption amount, you can still keep it by paying the trustee the non-exempt equity value.

The most important thing you need to know about protecting your car and your home is that there are two different types of personal bankruptcy filings. Chapter 7 bankruptcy liquidates non-exempt assets, but has the advantage of being completely wrapped up quickly, usually within four months. If you filed under Chapter 7 and your home and car equity fall within exemption limits, you can keep both assets while eliminating unsecured debts.

By contrast, Chapter 13 bankruptcy doesn’t liquidate assets. Instead, it allows you to catch up on your mortgage or car loan payments while holding on to your property. The process generally involves a three-to-five-year repayment plan, which works well if you have regular income but are behind on secured debt payments and want to keep your things.

If you’re considering filing for Chapter 7, and it’s possible, pay down as much of your secured debt as possible. Doing so will reduce the equity that exceeds the exemption limits. There are plenty of other important things you need to know before deciding on moving forward with a bankruptcy filing. An experienced New Jersey bankruptcy attorney can evaluate your situation and recommend the best way to move forward with your filing to maximize asset protection. Call us today to set up an appointment.

There are some life events that represent major changes.  Getting married, having a baby, and relocating are great examples of milestones marked with great excitement, as well as significant changes in expenses and financial responsibilities. If you’ve found yourself approaching any of these changes while you’re struggling with debt, you may be tempted by the idea of cleaning your economic slate by filing for bankruptcy. Before you jump into this decision, let’s take the time to investigate whether it is actually a smart move.

There’s no doubt that bankruptcy can offer relief from overwhelming debt. It puts an end to the stress created by collection efforts and provides a fresh start. If you have significant unsecured debts like credit cards, medical bills, or personal loans, filing for a Chapter 7 or Chapter 13 bankruptcy might make sense. Still, timing matters—especially when any of the following big life transitions are looming.

• Getting Married – Marriage generally introduces shared finances. Your future spouse’s financial health will become enmeshed with yours, and though they won’t be responsible for your pre-marriage debt, any joint accounts or property you acquire once you’re married will be complicated by a bankruptcy filing that comes after the wedding. Filing before your marriage is a good way to protect your future spouse from financial entanglements and avoid dragging their credit score into your financial issues.
• Having a Baby — Expanding your family means increased expenses: Those little people are expensive, from birth to nursery expenses to healthcare to childcare. Filing for bankruptcy would free up resources by eliminating or reorganizing debts (depending on whether you choose a Chapter 7 or Chapter 13 filing). But while it would let you redirect money toward your growing family, it will also impact your credit for up to 10 years. If you’re thinking of buying a larger home or purchasing a vehicle, your filing could make it harder to qualify for financing.
• Moving – Whether you’re moving around the corner into a better apartment or purchasing a new home, a bankruptcy filing can limit your ability to secure new housing, especially if you’re looking to buy or rent a place that requires a credit check. However, if your current financial situation or poor credit would make moving impossible or unmanageable, bankruptcy may be what you need to make a fresh start in a new location. Also, the bankruptcy exemptions and laws in your state can affect what happens if you file before or after relocating.

Filing for bankruptcy can be a smart move if it’s done strategically. If you’re struggling with debt and have big life changes on the horizon, contact our experienced bankruptcy attorneys to discuss the options that will work best for you.

When your debt is growing and you’re living paycheck to paycheck, it can be overwhelming. Many people who’d like to file for bankruptcy protection hesitate out of fear that the legal process will cost money that they just don’t have, but there are several bankruptcy options and financial relief programs specifically designed to help low-income individuals.

One of the most common bankruptcy options for low-income individuals is filing a Chapter 7 bankruptcy, also known as “liquidation bankruptcy.” A Chapter 7 bankruptcy filing lets qualified individuals eliminate most of their unsecured debts, including credit cards, medical bills, and personal loans. The process is typically fast—usually completed within three to six months—and provides a fresh financial start.

Chapter 7 is particularly helpful for those in lower income brackets. It is not available to everybody: You must pass what’s known as a means test that compares your income to the median income in your state. If your income is below the threshold, you may be eligible. While there’s some risk of certain assets being sold to repay creditors as part of the filing, many essentials—like clothing, household goods, and sometimes a car or home—are protected by exemption laws.

If your income doesn’t fall below the state median, you can still file for Chapter 13 bankruptcy.  This type reorganizes your debts into a more manageable three-to-five-year repayment plan, allowing you to catch up on missed payments while protecting assets like your home from foreclosure. Chapter 13 is generally a better fit for those who don’t qualify for Chapter 7 or who want to keep non-exempt assets that would otherwise be sold.

As for the actual cost of filing for bankruptcy, there’s no question that fees and legal costs can be a problem for low-income filers. The good news is that many courts allow for fee waivers or payment plans when legal fees would be a burden. Additionally, there are many legal aid organizations and pro bono attorneys who are there to assist with bankruptcy filings at little or no cost.

No matter what your income, before filing, you’re required to complete a credit counseling course provided by an approved agency. Though most of these courses have a fee to attend, some agencies offer free or sliding-scale services based on income. If you’re not comfortable with filing for bankruptcy, debt management plans or negotiating with creditors are low-cost alternative forms of relief.

For many low-income individuals, filing for bankruptcy can be the clearest path to financial stability. Debt relief is possible—even on a tight budget. Contact our bankruptcy attorneys today for more information on your best route forward.

If you’re overwhelmed by debt, filing for Chapter 7 bankruptcy holds the promise of a fresh financial start: Though you may need to liquidate some non-exempt assets to pay creditors, the action also allows you to discharge most of your debt. However, not everyone qualifies for Chapter 7 relief. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 introduced a means test designed to determine whether debtors are eligible to file under Chapter 7 or if they instead must file under Chapter 13 bankruptcy, which mandates agreeing to a repayment plan rather than a discharge.

The means test’s goal is to ensure that only those who truly can’t repay their debts can file to have their debts discharged. It does this by assessing a debtor’s income and expenses to calculate how much disposable income they actually have. If that number is too high, they may be steered toward Chapter 13 instead. The test has two parts:

• Comparing Income to the State Median – The means test first compares your household income to the median income for a same-sized household in your state, which is determined by the U.S. Census Bureau. If your test shows that your income is below the median, you automatically qualify for Chapter 7 and do not need to proceed to the second step.
• Assessing Disposable Income – If your income exceeds the state median, you then go on to complete a more detailed analysis of your income and allowable expenses, including housing, food, medical costs, and transportation. These are deducted from your income calculation to determine your disposable income. The Internal Revenue Service (IRS) has issued guidelines for many categories, but some actual expenses may be considered.

If, after deducting these expenses, you have little to no disposable income, you can still qualify for Chapter 7. If you have enough disposable income to repay a portion of your unsecured debts, you may be instructed to file for Chapter 13 and have a structured repayment plan created.

If you are a disabled veteran or your debts are primarily business-related, you may be exempt from the means test. This is also true if your financial situation changed suddenly because of a job loss, unexpected medical expenses, or a similar scenario. If you can present evidence of your inability to repay your debts, you may still be able to pursue a Chapter 7 filing.

The means test is an essential part of determining your eligibility for Chapter 7 bankruptcy. If you need more information or guidance, contact our experienced bankruptcy attorneys today.

Choosing to file for bankruptcy is the first step in restoring your financial health, but it’s far from the only decision you’ll need to make.  Homeowners who want to sell their home need to analyze the right way and time to do so. This important decision will impact your legal options, your ability to protect your assets, and the course of your financial recovery. Below, we’ll provide guidance to help you through this complex situation.

The first thing you need to know is what type of bankruptcy you’re going to pursue. The two options are Chapter 7 and Chapter 13. Which one you choose will make a big difference in how you should approach your home sale.

• Chapter 7 Bankruptcy: Known as a “liquidation bankruptcy,” people who file under Chapter 7 may result in an order to sell their non-exempt assets to repay their creditors. Though you may fear being forced to sell your home, many states offer homestead exemptions that protect a certain amount of home equity. This allows you to keep your property as long as its value falls within the exemption limit.
• Chapter 13 Bankruptcy: This type of bankruptcy involves the court creating a repayment plan for your debts over three to five years. It often involves changing the terms of loans or debt through reduced interest rates or other means. When filing under Chapter 13, debtors are generally able to keep their homes, but they must demonstrate the ability to stay current on their mortgage.

Depending on the specifics of your situation, selling your home before a bankruptcy filing may make sense, especially if you’re struggling to pay your mortgage or need to reduce your liabilities. The benefits of doing so include:

• Asset Liquidation: You can use the proceeds of the sale to help settle debts or to fund your transition to more affordable living.
• Avoiding Complications: Selling your home will simplify your financial situation, potentially streamlining the bankruptcy process.

If you’re considering a home sale, it’s a good idea to speak with an experienced bankruptcy attorney before either the listing or beginning the bankruptcy process: Selling a home too close to your filing could trigger scrutiny under bankruptcy laws. That’s because all transactions within a specific period before filing are reviewed for fraud or asset concealment. If the court believes you are trying to hide assets or avoid paying creditors, your bankruptcy application could be denied.

If you file for bankruptcy before selling your home, the bankruptcy court will supervise the process.  The benefits of selling after bankruptcy include:

• Debt Discharge: Your bankruptcy filing will likely reduce or eliminate your unsecured debts. This will allow you to sell your home without excessive creditor claims against the proceeds.
• Homestead Exemption: Your bankruptcy filing may preserve the equity you’ve built up in your home if it falls within the exemption. This will protect it from being used to satisfy creditors.

Every homeowner’s situation is unique, and the best approach depends on your state laws, financial circumstances, and goals. Consulting a bankruptcy attorney will make sure you’re making informed decisions and avoiding legal pitfalls.

Debt restructuring and bankruptcy proceedings are different approaches to the same or similar problem: they are applied when businesses or individuals are facing acute financial distress. Each has its advantages, disadvantages, and appropriate contexts, and choosing the right option is dependent upon your specific situation.  To get a better understanding of both, let’s look at what each represents, as well as their pros and cons.

• Debt Restructuring

Debt restructuring involves renegotiating the original terms agreed to with creditors to make debt repayment more manageable. Options include reducing the interest rate that the creditor charges, extending repayment periods, or reducing the principal amount owed.

Pros: Debt restructuring will allow your company to keep operating without disruption or the stigma that often comes with a bankruptcy filing. It also is less costly than filing for bankruptcy, as it involves less administrative and legal intervention or support, and can help maintain your relationship with your creditors.

Cons: Choosing debt restructuring is a two-way street. You’ll need cooperation from your creditor for the process to be successful, and that is not always available. The process is also only a partial solution, as it may only address a small portion of the financial problems that you are facing. It also does nothing to address operational inefficiencies or other issues that led to your initial financial stress.

• Bankruptcy

Bankruptcy is a formal legal process conducted under the supervision of the courts. There are multiple types of bankruptcies, including Chapter 7 (liquidation) and Chapter 11 (reorganization) for businesses and Chapter 13 for individuals.

Pros: Bankruptcy is a structured process that provides comprehensive debt relief, discharging many debts entirely and providing a fresh financial start. It also stops all creditor actions immediately upon the filing of papers, thus putting a halt to lawsuits, foreclosure actions, and wage garnishments.

Cons: Filing for bankruptcy does not necessarily require legal representation, but in most cases having an attorney makes a big difference in the success of your application. This expertise comes with costs. Bankruptcy also has the potential for harming your reputation, and will definitely damage your credit rating for a significant period. Depending on your situation, you may find yourself facing the sale or liquidation of assets that are important to you, and that may even mean ceasing business operations entirely.

If you’re trying to decide between debt restructuring and bankruptcy, it may be helpful to remember that debt restructuring is generally appropriate for individuals and organizations whose financial stress is manageable and who have a higher likelihood of getting cooperation from their creditors. Bankruptcy, on the other hand, is more appropriate when comprehensive debt relief is the only way to maintain financial liability, and where creditors are less likely to negotiate new terms.

Whichever option you choose or if you need help seeing which is most appropriate for your situation, contact our experienced law firm today for guidance.

The New Year is traditionally a time for a fresh start, and if you’ve just gone through a bankruptcy, it’s the perfect time to rebuild your financial health. As you turn to a new calendar year, think about establishing some new habits, setting financial goals, and adopting strategies that will help you achieve financial stability. Here are a few ideas to help you along the way.

• Start by creating a realistic, reasonable budget.

Everybody talks about sticking to a budget, but few people actually sit down and write one up. Financial experts say that doing so can make a big difference, and it’s not hard to do. Start by analyzing your income and your expenses. Write down what you spend on necessities like housing, utilities, food, and transportation, and how much money you have coming in. If the two don’t balance, then you’ll need to figure out where you can cut. Look at unnecessary expenses like subscriptions. Ask yourself whether you need something or want it. There are plenty of budgeting apps that can help you go through this exercise. If possible, try to prioritize savings and debt repayment.

• Build an emergency fund.

Things come up, and you need to be ready – otherwise, you’re likely to try to pull out a credit card and get yourself back into trouble. You don’t have to save a lot to make a difference. Set aside a manageable amount that you’ve included in your budget and stick to it.

• Work on rebuilding your credit score.

Bankruptcy will hit your credit score hard, so rebuilding your credit is important. Apply for a secured credit card or credit-builder loan and be responsible about using it to make small, regular purchases that you’ve already included in your budget and paying off the balance in full each month. Making timely payments is important to show that you’re reliable and worthy of future trust from creditors.

• Ask for help

There is no shame in bankruptcy and none in asking a financial advisor or credit counselor for help. That’s what they’re there for. They can provide you with advice on the decisions you’re making and can also help you avoid predatory lenders.

It’s easy to fall into the trap of feeling anxious or depressed about your financial condition after a bankruptcy filing, but the New Year is a great time to adopt a positive mindset. You can definitely do this! If you need guidance, don’t hesitate to contact our experienced bankruptcy attorneys. We’re here to help.