Retirement Plans and Bankruptcy

: Chris Lee Law Firm

  Filed under: Economy

retirementIf you are considering filing bankruptcy and worry you may lose your retirement funds to pay your creditors, know that most states consider these accounts completely exempt.

The Bankruptcy Abuse and Prevention and Consumer Protection Act of 2005 states that many types of retirement plans are exempt assets and may not be used to satisfy creditor demands.
If you have over $1 million in your IRA or other retirement plans, you will want to talk to a bankruptcy attorney as some of this may not be exempt.

Federal Exemptions

If you are in a state that does not consider your retirement account exempt, consider using the federal exemptions to allow for your IRA or other retirement accounts to be fully exempt from any creditors actions.

Automatic Stay

To be sure that no creditor forces you to liquidate your retirement plan to pay off debt, bankruptcy will stop any creditors actions. Once you file for bankruptcy, you are given an automatic stay that stops any collection attempts against you.

Filing bankruptcy is an excellent choice to have your unsecured debt eliminated protecting your retirement account for when you can no longer work and depend on that money to pay your bills and live on.

If you have overwhelming debt and your creditors are threatening legal action, contact a Dallas bankruptcy attorney to find out what options you may have.


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