Retirement Funds & Bankruptcy
Updated: Jul 8, 2020
WHAT HAPPENS TO RETIREMENT FUNDS IN BANKRUPTCY? Although the Bankruptcy Court may attempt to take some of your property, the Court and creditors typically CANNOT access your retirement funds when you file bankruptcy. There are exceptions, but most "ERISA-qualified" or tax-deferred retirement plans cannot be attacked in consumer bankruptcy.
CAN I KEEP MY 401(k) OR PENSION? If you file for Chapter 7, you may be able to keep any and all of your retirement. If you file for Chapter 13, the date when disbursements begins may impact what happens to future annuity or pension payments. But generally, most people can protect ERISA and tax-deferred retirement plans.
HOW IS MY RETIREMENT PROTECTED? This depends on whether an "anti-alienation" provision, generally created through ERISA or similar legislation, will protect your retirement account. If your account does not have an "anti-alienation" provision, it may be at risk. For this reason, it may be helpful to provide your attorney with a recent retirement statement and a copy of the policy before filing for bankruptcy.
If you have questions about bankruptcy or protecting your retirement from debt collectors, click here to schedule a free consultation, or call (256) 361 - 9829.