On June 23, 2025, the U.S. Supreme Court declined to hear an appeal in the case of Bronitsky v. Saldana, effectively upholding a Ninth Circuit Court of Appeals decision that allows Chapter 13 bankruptcy debtors to continue making voluntary retirement contributions during their repayment plans. The Supreme Court’s decision to not take the case is an important victory for consumer debtors. The case focused on whether retirement contributions qualify as “disposable income” under 11 U.S.C. § 541(b)(7), which would requireRead more
Bankruptcy Can Discharge Social Security Overpayments
In a significant victory for Social Security recipients, the Ninth Circuit Court of Appeals has ruled in Cooper v. Social Security Administration, reinforcing the vital protections that bankruptcy provides for individuals who have been overpaid Social Security benefits. The court held that the Social Security Administration (SSA) cannot bypass bankruptcy discharge protections to recover overpaid benefits from individuals who have not engaged in any wrongdoing. The ruling confirms that the SSA’s practice of withholding 100% of a recipient’s current benefit paymentsRead more
Bankruptcy and Medical Debt
Some research has shown that medical debt is the primary reason people need to file bankruptcy. A widely cited study published in the American Journal of Public Health in 2019 estimated that about 66.5% of bankruptcies were tied to medical issues, including both medical bills and the loss of income due to illness. Other studies have reported lower percentages, but medical debt consistently ranks among the leading causes of bankruptcy filings in the U.S. The lack of universal health insuranceRead more
Rising Interest Rates and Bankruptcy
The rapid rise in interest rates is having a big impact on the financial well-being of consumers and businesses. Although a rise in interest rates is often seen as a positive economic indicator, as it can signal economic growth, it can have negative effects on people who have taken out loans or who carry a large amount of debt. Rising interest rates can lead people to need to file for bankruptcy because of the increase in monthly loan payments. InterestRead more
Why Can’t I Repay My Parents Before Filing Bankruptcy?
One of the most important powers a Chapter 7 bankruptcy trustee has is the ability to set aside or void certain transfers of property or payments of money. The trustee uses this power to recover money that can be distributed to all the debtor’s unsecured creditors. The two general situations where a trustee can set aside a transfer or payment are where the debtor sells or gives away property for less than its fair market value or where the debtorRead more
