Is my retirement fund protected? Most of the time, yes, your retirement funds
are protected. However, there are a few exceptions. Such as, if part of your
retirement plan is having funds from the account being paid to you as income,
then the courts view it as regular income and it may be subject to assist with
payments toward the creditors you owe.
IRA and
Roth IRA accounts are mostly exempt from the bankruptcy, as well. The amount within the retirement funds that
will remain untouched by the bankruptcy
is limited to $1,362,800 per person. This amount is for all retirement plans
combined, not per plan/account. The
excess can be taken to pay back your creditors to get you out of your bankruptcy sooner. Though these limitations do exist, they are
not common, and vary by state. They also depend on which chapter of bankruptcy you file
under, and most of the time retirement funds are exempt from creditors.
For more information about how bankruptcy can affect your retirement, contact your local bankruptcy attorney.
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