Keeping Your Retirement Savings When Filing For Bankruptcy
Many people who have retirement assets and are considering filing for bankruptcy have strong concerns over what will happen to their 401(k)s, IRAs and other retirement holdings once they file.
In most cases, you can keep your retirement accounts. Federal law protects nearly all tax-exempt retirement plan holdings, but there are certain mistakes that can result in losing this protection.
At Case & DiGiamberardino, P.C., we can guide you through all of the complexities of the bankruptcy process, including protecting the savings you have earned over the years. Attorney John DiGiamberardino has more than 35 years of experience handling bankruptcy law matters for people in Berks, Chester and Lancaster counties and throughout eastern Pennsylvania.
Chapter 7, Chapter 13 And Retirement Savings
- IRAs (the protected amount is capped at $1,362,800, to be adjusted in 2022)
Not all retirement savings are protected under federal law. Certain pensions, for instance, may be subject to seizure in a Chapter 7 bankruptcy or may be included in your payment plan under a Chapter 13 bankruptcy. Consult with an experienced bankruptcy attorney to learn how the law applies to your specific retirement portfolio.
Mistakes To Avoid
Be careful about how you handle your retirement accounts prior to filing for bankruptcy. If you withdraw a 401(k), for instance, the money in that account will no longer be protected by federal law. Withdrawing an account to pay off debts may seem like a good idea, but it can actually be one of the most damaging mistakes you can make.
You also want to step carefully when funding retirement accounts once bankruptcy is on the horizon, as, depending on the timing, a bankruptcy court could look unfavorably upon such an action. The best way to proceed is to consult with a knowledgeable bankruptcy lawyer before making any important decisions.
Speak With A Knowledgeable Bankruptcy Attorney
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.