Funds Exempt From Seizure In Bankruptcy

: Chris Lee Law Firm

  Filed under: Bankruptcy Exemptions

bankruptcy exemptionsOne misconception held by many is that filing for bankruptcy will cause you to lose everything you own. While in some bankruptcy cases you may risk  losing some assets to creditors, much of your property can be protected through bankruptcy exemption laws. Each state varies on the amount of property that is protected during bankruptcy, but the federal exemption laws offer uniform protection for anyone who claims these exemptions.

Keeping Your Money

Aside from protecting one’s home and vehicle, up to a specified value, ¬†federal bankruptcy exemptions allow for much of one’s personal funds to be protected as well. Many people fear losing their retirement or government benefit funds to the hands of creditors.

The good news is that these funds are generally untouchable. The federal exemption laws allow for retirement funds, pension, profit sharing, stock bonus plans, IRAs, and 401(k)s to be exempt from seizure in the bankruptcy process. However, there is a cap placed on IRA funds, which is limited to $1,095,000.

Life insurance policies and funds are also exempt during bankruptcy. Life insurance policy payments required to care for a dependent are exempt, as well as payments that are paid on policies of a deceased family member. Unemployment, disability and Social Security benefit payments are also all exempt from seizure in bankruptcy.

 

 


Are you a candidate for bankruptcy?
Would you like to find out if bankruptcy is the right option for you? Try our Free Online Bankruptcy Evaluation. 4 easy steps to see if bankruptcy could be the right option for you!
  • Step 1
  • Step 2
  • Step 3
  • Step 4
Please Select Each Box That Applies To You
Creditor Harassment
Loss of Income
Foreclosure
Disability or Illness
Current Expenses
Auto Loans
Credit Cards
Medical Bills
Payday Loans
Do you have any additional information you would like to share?
Contact Information