Riverside Bankruptcy Attorneys – Many of the people who come into our Riverside bankruptcy law practice are worried how a Chapter 7 or Chapter 13 bankruptcy will affect their retirement money. They might have money in a 401k plan, or maybe a Roth IRA, and they are afraid that bankruptcy will take their retirement funds, and they will have to start over from scratch. If you’re one of those people, we want to reassure you that when we say bankruptcy will give you a fresh start, it doesn’t mean you’ll have to start fresh on your retirement planning.
The fact of the matter is that a Chapter 13 bankruptcy filing is a repayment plan, and is based on your paying down your debts at a rate you can afford. There is no liquidation of assets involved. If you don’t have sufficient means to pay off your debts under the provisions of Chapter 13, you will still probably be able to keep your retirement money, because most retirement funds are exempt under Chapter 7 bankruptcy. This means that the entire amount of your retirement fund is protected.
There is one exception, and that is in the case of a Roth IRA. If the value of one or more Roth IRAs is in excess of $1,095,00 per person, the excess will be taken by the bankruptcy court to pay back your creditors. However, very few people who are need financial protection have over a million dollars in a Roth IRA! You should also remember that while your retirement nest egg may be exempt under Chapter 7 , any funds being paid to you as retirement income are not. So, whether you have more or less retirement money, you should always consult with a good bankruptcy attorney.
Our Riverside Bankruptcy Attorneys, have over 30 years of experience that we can put to work in getting you through rough financial times, while protecting your retirement funds from creditors.
For more on the advantages of bankruptcy in getting you back on fresh financial footing, download our free book, The California Guide to Bankruptcy, to find out more on what bankruptcy can and cannot do. You can’t afford to be without this valuable tool in determining the path to your future!
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