Toms River, NJ - New Jersey bankruptcy attorney Daniel Straffi, Jr. of Straffi & Straffi Attorneys at Law ( ) today highlighted practical, lawful strategies for seniors to protect Social Security benefits and pensions while resolving unmanageable debt through bankruptcy. Drawing on long-standing federal and New Jersey protections, the initiative focuses on maintaining retirement income while addressing medical bills, credit cards, and other unsecured obligations that strain fixed budgets.

Rising living costs, medical expenses, and lingering mortgage or credit card balances continue to pressure retirees across the state. New Jersey bankruptcy attorney Daniel Straffi, Jr. outlined how Chapter 7 or Chapter 13 can provide a clear, court-supervised path to relief, starting with the Automatic Stay that stops collection calls, lawsuits, and garnishments upon filing. The approach centers on shielding Social Security and pension income, applying the correct exemption set, and structuring cases to protect essential assets such as a primary residence, a vehicle, and household goods.

Under federal law, monthly Social Security payments are treated as exempt, and many public benefits, including certain veterans and disability benefits, receive similar protection. Retirement accounts also receive substantial safeguards. Tax-exempt plans such as 401(k)s, 403(b)s, defined benefit plans, and most IRAs are protected up to a statutory limit of $1,711,975 per person as of April 1, 2025. In New Jersey, numerous occupational pensions are fully shielded, including those for teachers and school staff, public employees, firefighters, police, judges, and state police. To preserve these protections in practice, seniors are encouraged to keep exempt funds in a separate bank account to avoid commingling, which can complicate tracing and weaken claims of exemption. A New Jersey bankruptcy attorney can review account structures and advise on best practices before filing.

Housing stability remains a central concern. While New Jersey's state exemptions provide limited home-equity protection, the federal system offers a homestead exemption that, in 2025, protects up to $31,575 for single filers and $63,150 for married couples filing jointly in a primary residence. If equity exceeds those amounts, Chapter 13 may allow retention of the home by repaying non-exempt equity over time under a court-approved plan. Motor vehicles and household goods are often protected through specific federal exemptions, and a federal“wildcard” can be applied strategically to safeguard additional property value where needed. Medical debts, frequently the largest burden for retirees, are dischargeable as unsecured obligations in Chapter 7, clearing space for essential living expenses and health needs going forward.

Case planning requires careful attention to eligibility and documentation. The means test, choice between federal and state exemptions, classification of debts, and treatment of secured obligations benefit from thorough analysis at the outset. With thoughtful preparation, seniors typically keep essential property while obtaining a discharge of medical and credit card balances. Contrary to common myths, bankruptcy does not require surrendering everything, and creditors must cease collection once the case is filed. Although a Chapter 7 case appears on a credit report for up to ten years, eliminating high balances and missed-payment cycles often leads to a stronger debt-to-income profile than continued struggle.

About Straffi & Straffi Attorneys at Law:

Straffi & Straffi Attorneys at Law is a New Jersey firm led by attorney Daniel Straffi, Jr., serving individuals and families across Ocean County and surrounding communities. The firm's practice includes bankruptcy, divorce, and criminal defense, with a focus on practical, results-driven representation. Matters are handled with clear communication, diligent case preparation, and attentive service across state and federal courts. For a confidential consultation, call (732) 341-3800 or visit the firm's website to learn more about protecting Social Security, pensions, and other retirement assets in New Jersey bankruptcy cases.

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