As a bankruptcy lawyer, I think it’s my job to get my clients through the process as safely as possible, which means that once their case is closed, they have the same property as when they filed. I’d like to be able to take all the credit for doing that, but the Bankruptcy Code deserves some as well. Within the Code are rules called exemptions that allow you to keep certain personal property and real estate. What that means is that when you file, neither the trustee or your creditors can force you to turn that property over to pay your debts.
Common retirement accounts, like IRAs, 401(k), and other pension accounts are protected property. You’ll leave the bankruptcy process with the same amount you had when you filed. If you’ve being doing any research, you already know that though. And you’re likely not concerned about anything happening to it once you file.
What you should be concerned about is what happens to your retirement account before you file. If you’re draining your 401(k) or IRA to keep your creditors at bay, stop. You’re putting your future at risk. If you’re using your retirement account, you should consider whether or not that’s the best way to make ends meet. Besides, what happens when you drain your retirement accounts? That’s probably when you’ll come see me. If you come in before you empty your retirement accounts, I can help you eliminate the debts you are paying and make sure you keep your retirement intact.
My point isn’t to scare you into filing bankruptcy, but to get you to think about what your options are and to avoid putting your financial future in peril. Bankruptcy will help you stop robbing Peter to pay Paul.
If you have any questions about whether your retirement accounts are protected when you file bankruptcy, we hope you’ll come in for a free, no-obligation consultation with an experienced bankruptcy attorney. You can schedule your appointment online or call 303.331.3403 to set a time that is convenient for you.