Q: Do I need to file bankruptcy in order to apply federal exemptions to a default judgment against me on an unsecured loan?

A: Consult a bankruptcy attorney to evaluate your financial situation before you do anything.

A: For Federal Exemptions to apply you would need to be in Federal Court. Pennsylvania has exemptions for levy's and garnishments that a Pennsylvania attorney can advise you of. You should speak with a Pennsylvania attorney in Bradford County so they can assist you with your rights. Since you are on a low fixed income you probably qualify for legal assistance through the Bradford County Bar Association and the Pennsylvania Bar Association Pro Bono legal assistance program. This is the link to that program. https://www.palawhelp.org/ .

If this is your only debt filing bankruptcy isn't a cost-effective way to eliminate this debt. If you contact the attorney that obtained the Judgment against you and explain your situation there is a very good chance that they will either put you on an affordable payment plan, give you a very good settlement amount to pay it off and satisfy your obligation or may even forgive the debt entirely. You may want to contact the creditor's attorney for options and see if they will work with you.

A: You can indeed assert exemptions to protect certain assets from creditors, even outside of bankruptcy. While SSDI income is generally protected from garnishment, creditors might still attempt to seize assets such as your car or personal belongings to satisfy the debt; however, you can claim exemptions to protect these assets, up to certain limits defined by the law. It is important to respond to any lawsuit filed against you by asserting these exemptions and any other defenses you may have, and you might find it beneficial to consult with an attorney to help you navigate this process and protect your assets to the fullest extent possible under the law.