Bankruptcy and Your Retirement Plans
Filing for bankruptcy will not affect your retirement plans
No matter which chapter of bankruptcy you file, your retirement plans and IRA’s are safe. “Property,” as defined by the bankruptcy code, excludes qualified retirement plans and 401K plans. These are important exceptions from the code, as an asset that is not considered property of the estate does not have to be claimed exempt by the debtor.
The changes to the bankruptcy laws in 2005 made by Congress really helped debtors in numerous ways. One such way was the addition of 11 USC 522(d)12 which permits the debtor to exempt retirement funds to the extent they are in a fund or account that is exempt from taxation under sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code (“IRC”).
You should consult an experienced bankruptcy legal professional in Tucson AZ and seek knowledgeable advice, especially if you are of the age of retirement and considering filing. The law may protect savings that are formally designated to retirement, but there may be a question whether retirement savings will be excluded from the estate or included in the estate but exempt. It is not as easy as just tagging an investment or asset as “retirement” and have it be safe from creditors. Its a good idea, no matter what age, to start planning for your financial future, and even more important to plan for retirement even if you have debt and money issues now.
On behalf of the My AZ Lawyers, PLLC. June 12th, 2012. The My AZ Lawyers is a Mesa, Arizona based bankruptcy law firm serving all of Arizona including: Phoenix Bankruptcy Lawyer, Tucson Bankruptcy Lawyer, Mesa Bankruptcy Lawyer, Glendale Bankruptcy Lawyer, Chandler Bankruptcy Lawyer, Scottsdale Bankruptcy Lawyer, Gilbert, Arizona, Peoria, Arizona, Tempe, Arizona and surrounding communities.