Pensioner's personal bankruptcy – who and when can file a petition?

Consumer bankruptcy is a legal mechanism that allows individuals who have become insolvent, meaning they have permanently lost the ability to make timely repayments, to settle their debts. Age is not considered a barrier – retirees and pensioners can use this procedure on the same terms as employed or unemployed individuals. The key condition is proof of insolvency, as well as the lack of reasonable grounds for rejecting the application.

This bankruptcy allows, after meeting certain conditions, the reduction or complete discharge of liabilities, but this process involves partial seizure of income and – potentially – other assets.

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Pension and bankruptcy estate – what is included and what is not?

Upon declaration of bankruptcy, all assets of the debtor become part of the so-called bankruptcy estate, managed by the trustee. This should be understood as not only real estate or valuable movables, but also property rights, including, above all, retirement or disability pensionThe trustee has the right to demand that an appropriate portion of the benefit be transferred directly to the estate to partially satisfy the creditors.

Pursuant to Article 141a of the Act on Pensions and Disability Pensions from the Social Insurance Fund, deductions may amount to a maximum of 25% gross pensions, when it comes to obligations other than alimony. In the case of alimony obligations, this limit increases to 60%, however, in the case of consumer bankruptcy, alimony is not subject to cancellation - so it is not subject to analysis in this context.

In practice, after receiving the appropriate letter from the trustee, ZUS transfers the deductions directly to the bankruptcy estate. However, it should be emphasized that even if the 25% pension could formally be deducted, the trustee must take into account the so-called amount free from deductions, which protects the debtor against complete deprivation of the means necessary for life.

How much can a trustee deduct from a pension?

After declaring bankruptcy Income earned by the bankrupt exceeding the amounts exempt from seizure is included in the bankruptcy estate. In this way, the trustee in bankruptcy proceedings secures a portion of the funds to be used for debt repayment. Amounts exempt from seizure are amounts that the bankrupt can freely dispose of. So, how much is the portion of the pension exempt from seizure?

Pursuant to Article 141a of the Pensions and Disability Pensions Act, the trustee may request a maximum of PLN 25% of the gross ZUS benefit, after deducting health insurance contributions, income tax advances, and other statutory deductions. This is the upper limit for deductions – the trustee cannot exceed this amount.

From March 2025, the lowest gross pension is PLN 1,878.91 gross, which means that the amount free from deductions for non-maintenance benefits is PLN 1,409.18 gross (i.e. approx. PLN 1,282.36 net, depending on individual tax settlements and health insurance contributions).

This means that the trustee can only deduct the excess over this amount, and only up to 251 TP3T gross of the total benefit. In practice, therefore, for low pensions, deductions are small or nonexistent.

Case Study: Pan Tadeusz

Mr. Tadeusz, 74 years old, has a gross pension of PLN 2,000 per month. After deducting PLN 9,% health insurance contribution (without additional income tax, because the benefit does not exceed the limit of PLN 2,500 gross), his net pension is approximately PLN 1,820. According to the Act, the maximum deduction in personal bankruptcy proceedings is PLN 251 TP3T gross, i.e. in this case PLN 500 gross. However, the law guarantees that after deductions, the debtor will be left with at least PLN 751 TP3T of the minimum gross pension, i.e. the minimum amount free from attachment of PLN 1,409.18 gross in 2025, corresponding to this minimum protection.

If the deduction (PLN 500 gross) converted to a net amount would leave Mr. Tadeusz with less than PLN 1,409.18 gross / approximately PLN 1,287 net, then there is a violation of the law – the debtor must be left with at least this net amount. In such a case, a complaint or a motion can be filed with the court to correct the deduction amount.

Property free from attachment – not just pensions

In bankruptcy proceedings, the general provisions on protection of the debtor's assets, which are included, among others, in Code of Civil Procedure (CPC), more specifically in Articles 829–831 of the Code of Civil Procedure and in the implementing provisions. These regulations define the catalogue of assets that are exempt from execution in whole or in part, and therefore also from the trustee's management.

Pursuant to Article 829 of the Code of Civil Procedure, the following are exempt from seizure:

everyday objects: bedding, clothes, underwear, necessary furniture,

food and fuel for 30 days,

work tools – in the case of pensioners, this usually does not apply, but if they conduct gainful activity to a limited extent (e.g. handicraft), some tools may be protected,

items necessary for children's education – if the pensioner is raising grandchildren or has dependent children,

medicines, medical equipment and devices that facilitate the functioning of disabled people.

Additional benefits – 13th and 14th Pension

The so-called "thirteenth" and "fourteenth" pensions are of great support to seniors. Article 831 §1 of the Code of Civil Procedure extends protection, specifying, among other things, that social assistance benefits, alimony, care allowances, and 13th and 14th pensions are completely exempt from enforcement. This means that not only the bailiff, but also the trustee in bankruptcy bankruptcy proceedings cannot seize them – even if they are transferred to the debtor's bank account.

Bank account and attachments – practical protection of proceeds

It's worth paying attention to the technical side of protecting funds. Although regulations exempt some payments from enforcement, in practice – if they are transferred to a bank account – the bank may apply blocking the account at the request of the trustee or bailiff. Therefore, it is crucial to identify sources of revenue (e.g. with the description of the transfer "ZUS - retirement benefit"), and if necessary - apply to the trustee for exemption from seizure of specific funds.

Pursuant to Article 54 of the Banking Act, funds from wages, pensions, family benefits, etc. are generally protected, but banks use automatic mechanisms. Therefore, it is worth being proactive and retaining all correspondence regarding benefits, including those from Social Insurance Institution.

Is it possible to extend the amount free from seizure?

Yes. The law provides for the possibility of filing a bankruptcy petition with the bankruptcy court. application to extend the scope of benefit protection or limiting deductions if the bankrupt is liable above-average costs of living – e.g. expenses for medicines, medical care, maintenance of a dependent person, or runs a single-person household in which even the amount of PLN 1,200 net is not enough to cover basic needs.

In such a situation, the court, after reviewing the documentation, may limit deductions or establish a minimum subsistence threshold for the individual debtor. Such actions should be supported by documents such as bills, prescriptions, medical certificates, or disability certificates.

Case Study: Mr. Kazimierz

Mr. Kazimierz, 72, has been receiving a pension as his sole source of income for many years. He receives a monthly benefit from the Social Insurance Institution (ZUS) of approximately 2,000 PLN gross. Unfortunately, this amount proves insufficient. Mr. Kazimierz struggles with chronic illnesses, the need to take expensive medications, and housing and maintenance costs – his actual net income barely covers basic needs.

He decides to file for personal bankruptcy. Already during the planning stage, he learns that, according to the law, trustee may deduct from his pension a maximum of 25% gross benefits - in his case approximately PLN 500 per month, if he has no other income or maintenance obligations.

Additionally, there is a provision protecting against the complete withdrawal of funds: a minimum deduction-free amount of PLN 825 net (in some interpretations: PLN 75% of the minimum pension), which the trustee cannot exceed. In practice, therefore, despite potential deductions, Mr. Kazimierz will retain at least this amount for his living expenses. The 13th and 14th pensions, in turn, are completely exempt from seizure by the trustee—they remain fully at his disposal.

However, the standard rules in this case prove insufficient. Mr. Kazimierz documented in court that his actual living costs are significantly higher—medication, medical care, and basic expenses exceed what remains after deductions.

Therefore, he files a motion with the court to extend benefit protection and limit enforcement, based on above-average health care expenses and living circumstances. In such circumstances, the court may individually determine a higher amount free from seizure—significantly higher than the standard 25% threshold, leaving more funds to cover essential living expenses.

In cases similar to this one, courts have awarded higher tax-free amounts—for example, as much as PLN 2,000 net per month—if they found that the debtor's reasonable needs clearly exceed the general standard for retirees in difficult life circumstances. When the court grants such a request, the trustee can only deduct the excess over this established tax-free amount. Therefore, if Mr. Kazimierz receives PLN 2,000 gross (~PLN 1,600–1,700 net) and the court awards him a tax-free amount equal to his actual daily expenses, the deductions could effectively amount to PLN 0—meaning the entire proceeds remain at his disposal.

How can a retiree secure a minimum subsistence level during bankruptcy?

Consumer bankruptcy doesn't mean the retiree will lose all their funds – on the contrary, the regulations clearly protect the amount sufficient for survival. For low pensions, deductions are symbolic or nonexistent. Additional benefits (13th and 14th pensions, care allowances) are completely safe. Furthermore, everyday possessions, medications, rehabilitation equipment, or basic household appliances also cannot be seized by the trustee.

It's also worth remembering that bankruptcy courts are willing to consider the individual needs of older people, especially when their life, health, and family circumstances indicate particular living difficulties. By properly preparing documentation and consciously defending their rights, a retiree can navigate bankruptcy proceedings without compromising their dignity.

Length of proceedings and debt write-off

Personal bankruptcy procedure On average, it lasts two to four years, during which the retiree follows a repayment plan established by the court. This plan typically lasts up to 36 months, but in exceptional cases, it can be extended to 84 months. After its completion, the court orders the discharge of the remaining debts (except for alimony).

Summary – What a retiree considering bankruptcy needs to know

The pension is partially transferred to the bankruptcy estate – but only up to PLN 251,000 gross, after deductions. Additionally, there is a minimum net amount protection, which in practice ensures a decent minimum. Additional benefits (13th and 14th pensions) are completely free of deductions. If the situation is difficult – for example, medical expenses or supporting other dependents – it is worth filing a court application for extended protection. Although formal and time-consuming, the procedure allows for real debt relief, often resulting in debt write-off.

It is worth remembering before submitting the application

Preparing a reliable application requires collecting documents confirming the pension amount, the structure of liabilities, medical records, and information about dependents. Applying for extended coverage often requires detailed information – it's a good idea to seek the assistance of a lawyer or restructuring advisor at this stage. Expert support facilitates discussions with the trustee and also improves the chances of the court taking into account individual needs.

If you need help calculating your pension deductions, analyzing options for extending your coverage, or assistance with preparing documents or filing for bankruptcy, let us know. We'll be happy to help you navigate this process safely and efficiently.