When people faced with too much debt make the choice to file bankruptcy to get a fresh financial start, many questions arise. Some of the more common questions deal with your property, and what you can and cannot keep if you file for bankruptcy. The short answer is that for personal property you are able to keep things you continue to pay for (like your car), and the same is true for your real estate (which generally includes your homestead). But, there are other assets that are not easily defined as either real or personal property, such as a 401(k) or trust account. You work hard for your money, and to be able to set a little bit aside for retirement. So, it is only natural to wonder if you will be allowed to hang on to your retirement if you seek the protection of bankruptcy.
The current bankruptcy laws provide for certain exemptions; which means there are some things that are simply off limits, or exempt, from a creditor’s reach. As far as your retirement goes, the following types of accounts are exempt:
- 401(k) accounts.
- IRA accounts.
- Monies put into a profit sharing plan.
There are some exceptions to these rules, but they have to do with the amount in the account and not entire account itself. Any amount over the limitation is not considered exempt, but the rest of the account is yours to keep. There is also an exemption for retirement funds that are paid out as income rather than being set aside for your use later. Establishing what amount of money is needed for your support and living expenses during retirement is part of the equation also, and it is helpful to have a consistent history of living expenses to support your claim for what you need. For a full explanation of what parts of your retirement accounts are off limits, call to speak with one of our knowledgeable debt relief attorneys. We will examine your finances and give you advice on which type of bankruptcy suits you best, and tell you what you can expect to keep.
Call a Plantation, Florida debt relief attorney today for more information about what to expect during and after filing for bankruptcy. We have helped others, and are here to help you too.